Chapter 9: Underwriters

Question 1

Underwriter responsibilities

Answer 1

• Make decisions on behalf of the insurer whether or not to accept a risk
• Detemines the t+cs on which they accept
• Specialise in a CoB
• In lloyd’s market they are employed by a managing agent

Question 2

Functions of an underwriter

Answer 2

Assess the risks presented to the pool

determine whether or not to accept the risk and how much of it

Determine T+Cs

Calculate appropriate premium

Question 3

Reasons for writing in a subscription market / A proportion of a risk

Answer 3

• Size of risk and authority levels
• Balancing a portfolio
• Insurance broker input (broker request)
• New CoB

Question 4

What happens when an overseas market is involved in a subscription market placement with LM insurers?

Answer 4

• The risk is partially placed in their home market and the rest of the balance presented to LM

Question 5

Role of a leader in subscription market

Answer 5

• Review risk presentation of the broker
• Consider whether or not to accept it
• Decide T+Cs
• Quote a premium

Question 6

What makes a good lead underwriter

Answer 6

• Provide good quotations
• Credible and supportable for the follow market

Question 7

Role of the follow market

Answer 7

• Create a separate distinct contract of insurance between insurer and insured
• Request premium
• If a risk is popular the broker may opt to not use fussy UWs
• if a risk is unpopular, the broker may need to ask Uws to take a larger share

Question 8

European federation of Insurance intermediaries (BIPAR) principles

Answer 8

1. Intermediary specifies demands of clients with reasoning
2. Broker will advise client of market structures available
3. If Client chooses Multiple insurer, broker must review and explain relevant benefits
4. Intermediary should not accept a condition where an insurer seeks to reserve itself the right to increase their premium
5. Broker will keep client informed of progress

Question 9

What happens if there are multiple placements

Answer 9

Broker must prepare and present multiple sets of information to XIS

Question 10

Overall leader of a contract

Answer 10

Could be overseas even in an LM policy

Broker/intermediary will advise underwriters of the terms set

Question 11

Slip Leader

Answer 11

• May not agree with overseas T+Cs
• Can lead the London market slip instead

Question 12

Bureau leader

Answer 12

If slip lead is from a company, the first lloyd’s underwriter on the slip

Slip leader would be the bureau leader for the company market

Question 13

General Underwriters Agreement

Answer 13

Part 1: Non-material changes which will be agreed with leader only

Part 2: Anything not in part 1 or 3 generally which is leader and some agreement parties

Part 3: Material changes which should be agreed with everyone

Question 14

Identifying agreement parties for claims

Answer 14

• Built-in claims handling agreements streamline process in london market
• insurers cant add themselves automatically