Flashcards in Chapter 9 - Underwriters Deck (15)
Role of the underwriter
Make decision on behalf of insurer whether to accept risk
& determines t&cs when acceptance made.
What is a ‘scratch’?
Initials & date
Confirming underwriter has seen the presentation made.
In a Lloyd’s syndicate who are underwriters employed by?
Functions of an underwriter
Manage pool of premiums as effectively and profitably as possible.
- assess risk
- decide to accept risk
- determine t&cs
- calculate premium
What is placing a risk on a ‘subscription basis’?
More than one insurer participating in a risk.
Why might an UW only take a proportion of a risk?
- Size of risk & authority levels
- Balancing portfolio
- Insurance broker input
- New class of business
Leading UW roles
- Review the risk presentation from the broker
- Consider whether to accept
- Decide t&cs
- quote premium
Following market underwriters
Support the leading underwriter and take a share of the risk - might request more premium before agreeing to support
What does ‘competition law’ prohibit?
Behaviour where the normal competitive nature of the insurance market is removed. Prevents markets acting together to detriment of client
BIPAR (European Federation of Insurance Intermediaries) 5 high level principles
1. Intermediary shall specify demands and needs of client
2. Before placing risk, intermediary will review and advise client on market structures to meet its needs
3. If client places risk, intermediary will review, explain relative merits and advise on options
4. After placing risk previously agreed premium of lead and following insurers will not be aligned upwards
5. Intermediary keep client informed of progress
Three different types of leader
General Underwriter Agreement (GUA) divides post bind changes into 3 categories
1. Non-material. Agreed leader only.
2. Anything not in 1 or 2. Leader & some agreement parties
3. Material changes. All underwriters.
What causes difficulties with electronic trading?
Multiple separate slips because of differences in t&cs - more parties have to be involved
Single Claims Agreement Party (SCAP) - Feb 2018
Allows subscribing insurers to agree at time of placing that claims will be agreed by a single insurer only. Slip leader. Must be Lloyd’s syndicate or UK auth insurer.