The amount of insurance or reinsurance on a risk (or occurrence) that applies to a loss before the next higher excess layer of insurance or reinsurance attaches.
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The amount of loss which attaches before the next higher excess layer of insurance or reinsurance attaches.
Tag: REINSURANCE
Underlying Premium
See: Base Premium, Premium Base, Subject Premium.
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A ceding company’s premium to which the reinsurance premium rate (factor) is applied to produce the reinsurance premium. In other words, the reinsurance premium is a percentage of the ceding company’s premium.
Underwriting and Claims Control Clause
A clause in a reinsurance treaty reserving control of underwriting and claims negotiation to the reinsurer.
Underwriting Capacity
Depending on the context this term may refer to: (a) a member’s allocated capacity (b) syndicate allocated capacity, with or without the addition of cover from qualifying quota share reinsurance; (c) the total underwriting capacity of all syndicates combined, with or without the addition of cover from qualifying quota share reinsurance; or (d) the underwriting capacity of an insurance company or a reinsurance company. Underwriting stamp The stamp that is applied to a slip by an underwriter to signify his acceptance of a risk. It shows the number and pseudonym of the syndicate or the name of the (re)insurance company for whom the underwriter acts and has a space for his underwriting reference to be inserted. The underwriter will insert his line on a slip next to his underwriting stamp.******The maximum amount of money an insurer or reinsurer is willing to risk in a single loss event on a single risk or in the aggregate on all risks in a given period. This is the limit of capacity for an insurer or reinsurer that may also be imposed by law or regulatory authority. Common NAIC aggregate underwriting capacity is 3:1 (i.e.three dollars of premium for each dollar of surplus) depending on line of business. Many states also impose a per risk limit of 10% of surplus.*****
The risk retention ability of an insurer or of the insurance industry as a whole. Determined by the amount of surplus.
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US: The risk retention ability of an insurer or of the insurance industry as a whole. Determined by the amount of surplus.
Underwriting or Working or Per Risk Covers
To provide protection in the event of loss caused to one risk or loss arising from one event as the case may be. In contrast to Catastrophe or per event covers.
Underwriting Year Basis
In rating the use of all premium written as arising from all policies written or renewed during the year and all losses relating to those same policies, whenever they occur.
Underwriting Year Experience
See: Basis of Attachment.
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Simplistically, the segregation of all premiums and losses attributable to policies having an inception or renewal date within a given 12 month period.
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Underwriting result based on written premiums and ultimate losses from loss events falling within the same accounting period, where the accounting period is the period covered by the insurance policy or reinsurance agreement, regardless of when the premiums and losses are actually reported, booked, or paid. See Accident year experience and Calendar year experience. Underwriting losses are typically offset by investment income.