Chapter 8 - GI Markets Flashcards
Sidecar
A financial structure that is created to allow investors to take on risk of a group of insurance policies
Committed capital
A contractual commitment to provide capital to an insurer after a specific adverse event occurs that causes financial distress
Contingent Capital
A contractual commitment to provide capital to an insurer after a specific adverse event occurs that causes financial distress
Direct insurer
An insurance company that provides insurance for individuals and companies
London market
Part of the insurance market in which insurance business and reinsurance business is carried out on a face-to-face basis in the City of London
Lloyds
A marketplace made up of members who provide capital and accept liability for risks that are underwritten in return for their share of any profits that are earned on those risks
Syndicate
A group of members who collectively coinsures risks
Self-insurance
The retention of risk by an individual or organisation, as distinct from obtaining insurance cover
Captive insurance
An insurer that is wholly owned by an industrial or commercial enterprise and set up with the primary purpose of insuring the parent or associated group companies and retaining premiums and risk within the enterprise
Open market captive
An authorised captive that provides insurance to risks other than those of its parent
Protection & Indemnity (P&I) Club
Mutual associations of ship owners that were originally formed to cover certain types of marine risks (mainly liability), that could not be covered (at an acceptable price) under a commercial marine policy
Pool
An agreement under which the parties agree to share premiums and losses for specific insurance classes or types of cover in agreed proportions
Insurance securitisation
A mechanism whereby insurers borrow money from capital markets and repay the money subject to the experience on the book being satisfactory
