Insurance Flashcards
What is reinsurance?
If an insurance company feels the risks it is running is too great, it can pass on some of these to a second company. This is reinsurance.
What is Lloyds of London?
Lloyd’s of London acts simply like any market where buyers represent businesses or clients who want to hedge different risks. Buyers look to purchase protection (insurance policies) and sellers represent members who provide and sell protection against risks faced by these businesses or clients. The market also includes brokers who help buyers and sellers meet an optimal match and managing agents who handle syndicates on behalf of members (the ones who provide the capital).
What is a syndicate?
A syndicate is a temporary professional financial services group formed for the purpose of handling a large transaction that would be hard or impossible for the entities involved to handle individually. Syndication allows companies to pool their resources and share risks. There are several different types of syndicates, including underwriting syndicates, banking syndicates and insurance syndicates
What is the Lutine Bell? (lloyds of london)
Rung when important news is announced - two rings for good, one ring for bad.
How do underwriters make money?
The capital used by the underwriter can be invested to earn interest. The insurance premiums can also be invested and if premiums exceed claims there is also profit. Hence an underwriter’s money is workin several times over.
How is Lloyds regulated?
It is regulated by the financial sevices authority.
