Glossary of Key Terms and Initials
This glossary is made up of definitions (some very old[1]) from a range of sources that I have been given over a period of some years.  – the core ones  probably being Lloyd’s, CII, Hiscox, Guy Carpenter, Communicade and many of my own.
As in anything, different people can see different words in different contexts

Although there is a good cross-section of words and definitions, there is likely to be more emphasis on Reinsurance (my background).

Where a word or words are shown in bold there should be(!) a further definition of that particular word.

THIS IS DEFINITELY WORK IN PROGRESS (seems everlasting), especially towards the higher letters in the Alphabet. Any corrections, additions greatly appreciated – please Contact Me

[1] e.g. Insurance Institute of Australia (1985)


NAME AT LLOYD’S– Historically an individual member (as compared to a corporate Member)  with unlimited liability. Since 6 March 2003 no person has been admitted as a new member to underwrite on an unlimited liability basis.  – see Member

NAMED INSURED:   Any person, firm, or corporation, or any member thereof, specifically designated by name as insured(s) in a policy as distinguished from  the others who, though unnamed, are protected under some circumstances.

NAMED PERIL POLICIES:   Named Peril Policies specify what perils are insured against, as opposed to so-called all-risk policies

NET LINE The amount of insurance the cedant carries on a risk which is maintained solely for its own account and is not reinsured in any way, other than by catastrophe stop loss or any other form of aggregate protection.

NET LOSS The amount of loss sustained by an insurer or reinsurer after taking into account all recoveries by way of reinsurance, salvage and subrogation.

NET PREMIUMS Premiums received by the insurer after the cost of reinsurance and acquisition costs  See also Premium Bases.

NET RETAINED LINES CLAUSE Usually specifies that any claim is calculated after recoveries from any reinsurances that inure to the benefit of the layer (prior reinsurances), whether they are actually collected of not (reinsurer insolvent…..) Contract does not pick up losses caused by mistakes or losses that are greater than would normally be.

NO  CLAIM BONUS A contractually agreed refund of premium if there are no claims under the contract in question.

NOMINATED MEMBER A member of the Council of Lloyd’s who is not an external member or a working member and whose appointment has been approved by the Governor of eth Bank of England.

A reinsurer not licenced or authorised to transact reinsurance or a particular line of reinsurance in the jurisdiction in question.  It is very likely that no credit can be given to a reinsured in their Annual Statement if they place reinsurance with such a reinsurer.

NON-DISCLOURE (of a Material Fact) – See duty of disclosure.

NON-MARINE This Sector includes a very diverse range or property and casualty business classes. Initially, this line of business was incidental to Marine hence its name.

Reinsurance where there is no proportionate sharing of risk or premiums or losses – see also Excess of Loss. Technically, Excess of Loss Ratio Covers (Stop Loss) should only be referred to as Non-Proportional as they do not pay in excess of a loss but in excess of a loss ratio.

NON WAIVER OF RIGHTS also called a ESTOPPEL Clause A clause in a reinsurance contract that states that all conditions continue even if it looks like the reinsured is “estopped from imposing it because of some previous action or lack of action. e.g. Reinsured does not chase 1st, 2nd, 3rd Quarter premiums but does chase the 4th and demands payment or else….. The clause has effect even though they did not chase for 1st, 2nd or 3rd Quarter premiums.

NON – SUBSCRIPTION PLACEMENT also known as Split Placement, Verticalisation, Differential Terms, Patchwork Placement. Basically a concept where every underwriter, takes a share of a contract, at their own specific price and terms and possibly even their own layering. Came into fashion for reinsurance 2010’s


OBLIGEE:   Broadly, anyone in whose favor an obligation runs. This term is most frequently used in surety bonds, where it refers to the person, firm or corporation protected by the bond.

OBLIGOR:   Commonly called principal; one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligors.

OCCUPANCY:   In insurance, this term refers to the type and character of the use of property in question.

OCCURRENCE COVERAGE:   A policy providing liability coverage only for injury or loss that occurs during the policy period, regardless of when the claim is actually made.

 – see Accident Year and Premium Bases

OPEN COVER:   An agreement whereby the Assured undertakes to declare every item (e.g. shipment, vessel, etc. as appropriate) that comes within the scope of the cover in the order in which the risk attaches. The insurer agrees, at the time of concluding the contract, to accept all valid declarations up to the agreed limit for each declaration. An open cover may be for a fixed period or always open; subject to a cancellation clause.
See also Facultative Open cover

OPEN MARKET BASIS See Open market business.

OPEN MARKET BUSINESSInsurance business that may be offered to and placed with any managing agent that is willing to underwrite it on behalf of its managed syndicate. It excludes business that is underwritten pursuant to a binding authority.

OPEN MARKET CORRESPONDENTA firm that produces business to a Lloyd’s broker for placement on an open market basis.   Lloyd’s requires that firms in certain overseas territories must be approved or registered by its attorney in fact or general representative before they can produce business to one or more sponsoring Lloyd’s brokers for placement on an open market basis.

OPEN YEAR OF ACCOUNT (LLOYD’S)A year of account of a syndicate which has not been closed by reinsurance to close. There are two types of open year of account; naturally open years of account and run-off accounts.
Syndicates are required to keep each year of account open for a minimum of three years before it may be closed by reinsurance to close. In normal circumstances a syndicate will therefore have three naturally open years of account at any point in time: the third year of one year of account, the second year of the following year of account; and the first year of the next year of account. Thus in 2015 the 2013 year of account is in its third year, the 2014 year of account is in its second year and the 2015 year of account is in its first year.

Where the liabilities attaching to a particular year of account of a syndicate (including any prior year of account closed into that year) cannot be quantified after three years then that year of account will be left open until such time as a reinsurance to close may be effected or all the liabilities attaching to that year of account are extinguished.

ORDERThis may refer to –

(a) the communication by a broker to an underwriter of a client’s acceptance of his  quotation;
(b) the amount of the sum insured that is covered by a particular slip where more than one slip is used to arrange cover.

ORIGINAL PREMIUM– the premium paid for the Original insurance

– the premium paid by the insured before any local deductions….

Original Net Rate – ONR
The Original Premium paid by the insured after deduction of local commission or similar. ….

A reinsurance expression indicating that the terms underwritten by the reinsures are on exactly the same basis as those of the cedant on the original policy.

OUTSTANDING LOSSES: Losses which have occurred but are unsettled at the time of preparation of either proportional or excess of loss accounts.

OUTSTANDING LOSS RESERVE(Deposit): An amount of money credited by reinsurers to an insurance company to cover known outstanding losses. A form of guarantee that a reinsurer will meet its obligations under known outstanding claims advised but not yet settled. The insurance company would normally pay reinsurers a notional rate of interest as compensation for withholding such a deposit.

A term used to describe reinsurance contracts that are placed by the reinsured as compared to Inwards reinsurance .(Reinsurance accepted by the reinsured.

OVER AGE PREMIUM:   An additional premium charged on a cargo open cover declaration because the carrying vessel is outside the scope of the classification clause.

OVERALL PREMIUM LIMIT (or overall premium income limit) (OPL) – The limit of the amount of insurance/reinsurance business that a member can underwrite in a given year of account, expressed in pounds sterling. It is the aggregate of the member’s allocated capacity on each syndicate in which he participates.

OVER-LINE A commitment by an insurer or reinsures which exceeds its capacity or a cession which exceeds the permitted reinsurance limit.

Has more than one use but fundamentally is an allowance paid by a reinsurer or retrocessionare over and above the original acquisition costs.
e.g. An additional commission deducted by the reinsured in addition to the normal reinsurance commission.
In Non-Marine it possibly indicates that the business is retrocession business
– original terms plus a extra commission to cover the costs of the reinsurer who is retroceding it.

N.B. In Marine the term is often used in Reinsurance to represent additional commission
Commission 20% (covering costs)
Over riding commission 5% (encouraging good business)

OVERWRITING Where a syndicate exceeds its allocated (PREMIUM) capacity. Depending on the scale of the problem the managing agent of the syndicate may be required to cease underwriting some or all new business and the members may be required to make available additional funds at Lloyd’s to cover the overwriting. Has happened in the past and caused serious problems for the investors when results were very bad as well.

Reinsurance being purchased (place outwards) as opposed to underwritten (Inwards RI)

PACKAGE POLICY:   An insurance policy including two or more lines or types of coverages in the same contract.

PARTIAL LOSS:   A loss under an insurance policy which does not either (1) completely destroy or render worthless the insured property; or (2) exhaust the insurance applying thereto.

PARTICIPATING REINSURANCE     – See “Proportional Reinsurance”.

PARTICULAR AVERAGE:   (Marine) Partial loss of the subject matter insured proximately caused by an insured peril.

PATCHWORK PLACEMENT  – See Non- Subscription Placement

In a  non-proportional contract LIMIT for the Contract divided by the PREMIUM.
e.g. Premium 10,000 – Coverage 100,000 xs 25,000
Payback 100,000/10,000 = 10:1 (once every 10 years)
Basically is used to show a view of the underwriters thinking re a chance of a loss or losses at this Level
The inverse is called “Rate on Line (ROL) Premium/Cover x 100/1  10,000/100,000 = Rate on Line (Limit) 10%

PAYROLL AUDIT:   An examination of the insured’s payroll records by a representative of the insurance company to determine the premium due on a policy.

PEAK RISKS Risks for which the Sums Insured are some of the highest in a particular market. It is possible that some of these risks might be specifically excluded from some reinsurance Treaties to ensure that the reinsurer does not pick up unexpected additional shares of losses on major risks.


PER EVENT X/L (Reinsurance) A type of non-proportional reinsurance treaty under which the reinsurer, within the scope of the contract pays any loss in excess of the deductible, up to the Cover Limit for a loss caused by 1 event.
e.g. $20,000,000 xs $10,000,000 any one event. Loss from 1 earthquake $12,000,000 fgu (from the ground up). Claim to the contract $2,000,000

PER POLICY X/L (Reinsurance) A type of non-proportional reinsurance treaty under which the reinsurer, within the scope of the contract, often Third Part Liability pays any loss in excess of the deductible, up to the Cover Limit for a loss on one policy.
e.g. $500,000 xs $100,000. Loss from 1 policy $250,000 fgu (from the ground up). Claim to the contract $150,000

PER RISK X/L (Reinsurance) A type of non-proportional reinsurance treaty under which the reinsurer, within the scope of the contract pays any loss in excess of the deductible, up to the Cover Limit for a loss caused on 1 risk.
e.g. $2,000,000 xs $1,000,000 any risk. Loss on one factory  $1,200,000 fgu (from the ground up). Claim to the contract $200,000

PERIL:   A term used in the Marine Insurance Act (1906) (MIA 1906) to denote a hazard. e.g. Fire, Lightening, Earthquake The principle of proximate cause is applied to an insured peril to determine whether or not a loss is recoverable.

PERILSa loss assessment body set up to provide an estimate of Catastrophe Losses within Europe – receives data from at least 13 European Countries
Enables contracts such as ILWs (Industry Loss Warranty covers) to be placed based on Estimated Market Losses within Europe to be completed

PERIOD There are various forms of Period that can be specified under Excess of Loss Contracts – particularly e.g.
Losses Occurring During the period (LOD)
Risks attaching during the period / Policies issued during the period (RAD) Losses discovered during the period

LOSSES OCCURRING DURING (LOD): An expression used to signify that losses which occur within the period of the reinsurance contract are covered, no matter when the original insurance policy was issued.

Cover is granted under an Excess of Loss contract for any losses on policies that incept in the contract period in theory at least, no matter in what year afterwards any losses occur. The reinsurer is at risk until all policies covered by the contract for this period have expired and all losses have been fully settled. In some contracts a Sunset Clause may be included in the conditions stating that any loss that is advised after 3/5/7 years is NOT Covered.

Imposed by Treaty reinsurers when the Proportional Treaty is based on the PML (Probable Maximum Loss)
4 Line Surplus
Retention 2,000,000
Sum Insured 10,000,000
Retention 2,000,000 Cession 8,00,000
20%                            80%      of any Premium (less commission) and any claim

The reinsurer has agreed to accept cessions based on the PML, thus they are only on risk (in theory) for that cession – as an example
PML 8,000,000.
Retention 2,000,000 PML  Cession 6,000,000 PML
25%                      75%            of any premium and in theory any claim

Whilst reinsurers accept that PMLs can go wrong – it is the reinsured’s fault that they under estimated the PML, so the reinsured is penailsed for making this mistake.

Total Loss 10,000,000
Retained 25%                   2,500,000
Loss to Treaty 75%         7,500,000
Error              7,500,000 – 6,000,000 = $1,500,000
Reinsurer pays only 50% of any error
6,000,000 + 50% of 1,500,000 = 750,000 = 6,750,000
Reinsured pays 2,500,000 + 750,000 =      3,250,000

Another example on a partial loss
Total Loss 9,000,000
Retained 25%                   2,250,000
Loss to Treaty 75%          6,750,000
Error to Treaty                 6,750,000 – 6,000,000 = $750,000
Reinsurer pays 6,000,000 + 50% of 750,000 = 375,000 = 6,375,000
Reinsured pays 2,250,000 + 375,000 =                                 2,625,000

PERSONAL ACCIDENT: Type of insurance which provides for the payment of specified sums in the event that the insured suffers some bodily injury as a result of an accident.

PERSONAL INJURY:   Injury other than bodily injury arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person’s right to privacy committed other than in the course of advertising, publishing, broadcasting, publishing, or telecasting.

PERSONAL INJURY COVERAGE:   Liability insurance coverage for third party claims for damages which are other than physical such as libel, slander, false arrest, etc.

PERSONAL INJURY PROTECTION:   The formal name usually given to no-fault benefits in states that have enacted mandatory or optional no-fault Automobile Insurance coverages. PIP usually includes benefits for medical expenses, loss of work income, essential services, accidental death and funeral expenses.

PERSONAL LINES (Personal Insurance):   This term is used to refer to insurance for individuals and families such as private passenger automobile or homeowner insurance and to help differentiate it from Commercial Lines

PLACING BROKERThis term may refer to an individual broker or a broking firm that places cover directly with one or more underwriters. Compare producing broker.


PML – see Probable Maximum Loss.

Evidence of an insurance or reinsurance in a prescribed format

POLICY HOLDERThe person who is insured under a contract of insurance.

POLICY LIMITAnother term for limit of indemnity. It refers to the maximum amount payable under a policy of insurance or reinsurance, either overall or with reference to a particular section of the policy.

POLLUTION REINSURNCE – Cover normally only given for losses caused by sudden and accidental damage at a particular place in a particular way

 POOL An association of insurers or reinsurers through which particular types of risks are underwritten with premiums, losses and expenses shared in agreed ratios. Commonly, pools are formed to handle specialized or unusual types of risks.

 PORTFOLIO (of Business): A block of business whether originally insured (e.g. all industrial complexes) or part of a reinsurer’s overall account (e.g. all catastrophe programmes written with the same territorial scope).

PORTFOLIO TRANSFERS (See Premium Portfolio and Loss Portfolio): A calculation used by insurers and reinsurers in Proportional Reinsurance Treaties to enable an amount of money to be transferred from one period (year) to another in order to facilitate the accounts process

A condition in a reinsurance contract that losses of a specific size or larger must be advised to reinsurers immediately.

PREMIUM PORTFOLIO (Reinsurance) A payment debited to an outgoing reinsurer on a Proportional Treaty equal to the unearned premium on in force business or made to an incoming (new) reinsurer to cover ongoing liability on in force basis thus simplifying accounting procedures.

It is an amount of money transferred from reinsurers in 1 Treaty period to reinsurers in the next Treaty Period (in many cases just a book entry from Reinsurer A to Reinsurer A) reflecting the unearned premium in respect ounexpired risks. Thus any losses that occur are now covered in the 2nd Treaty Period.

There a at least 6 different methods for calculating the Premium Portfolio
Pro-Rata – based the unexpired period of each risk separately – less Treaty Commission %
1/24ths 1/24th of the premium for the first month, 3/24ths of the premium for the second……23/24th of the last month, less Treaty Commission (percentage)
Assumption – risks are issued evenly over a month.
1/8ths 1/8th of the premium for the first quarter, 3/8ths  of the premium for the second quarter ……7/8ths of the last Quarter. less Treaty Commission (percentage)
Assumption – risks are issued evenly over a quarter.
50% of the premium for the year less Treaty Commission (percentage)
Assumption risks are issued evenly throughout the year. Probably quite inaccurate, but very easy to calculate.
35% of Premium
Assumptions – risks issued evenly throughout the year and Treaty Commission 20%
e.g. 100% of Premium – 20% Commission = 80% x 50% = 40%
40% of premium Assumptions – risks issued evenly throughout the year and Commission 30%
e.g. 100% of Premium – 30% Commission = 70% x 50% = 35%

Loss Portfolio An amount of money transferred from reinsurers on one period of a Proportional Treaty to the next to transfer responsibility for losses outstanding at the end of the 1st period to the next.

Normally based on 90% of the known outstandings, with a provision that the numbers can be adjusted at the option of the reinsured, in the event of material discrepancies, after three years. (This is rarely done).

Why 90%?.
Since reinsurers expect some saving by the time of ultimate settlement, reinsurers normally allow a notional discount.

Related Terms
“Clean Cut” treaty
Premium and Loss Portfolios in and out every year

“Accounts year” treaty
Portfolios (possibly) at commencement and termination of the contract, – no portfolios in between. Just regular accounts. – concept works well where there are consistent reinsurers.

 “Occurrence Year” treaty (Also known as Accident Year)
Premium portfolio in and out (ongoing risk is being transferred to the next treaty year) but NO Loss portfolio.
– losses stay in the year of their occurrence

“Underwriting Year” treaty (Also known as Run Off basis)
All premiums and all losses go back to the Treaty Tear in which the risk incepted – very high administration – found in Marine, Engineering…where there is a degree of long tail business or uncertainty in Loss Reserving.

All losses above a certain amount must be advised specifically to reinsurers

Written Premium (WP)
Premiums for the class or classes being discussed in respect of business incepting in the year 

Earned Premium
Premiums for the class or classes being discussed that it takes into account an amount to cover UPR (Unearned Premium Reserve), often calculated at 40%

                      20X1              20X2              20X3              20X4

WP              1,000,000      1,200,000           1,500,000      2,000,000

+ UPR                  –              400,000             480,000         600,000

– 40% UPR     (400,000)     (480,000)            (600,000)      (800,000)

Earned           600,000         1,120,000          1,380,000     1,800,000

Thus if business is growing, the Earned Premium will always be less than the Written Premium

Both of these could be Gross, or Net
Gross Premiums of the reinsured
The total premiums for the class or classes being discussed after taking into account Refunds, Additional Premiums….before deducting any costs and cost of Reinsurance or Retrocession

Net Premium of the reinsured
The total premiums for the class or classes being discussed after taking into account Refunds, Additional Premiums… after deducting all acquisition costs and costs of Reinsurance or Retrocession

In X/L (Excess of Loss) there is also
Gross Net Premium Income (GNPI)
The total premiums for the class or classes being discussed after taking into account Refunds, Additional Premiums… after deducting any costs for Reinsurance or Retrocession that inure to the benefit of the contract under discussion. (Pay first)
In general it is going to be very similar if not the same as the retained premium of the reinsured.
Gross Premiums                                                                                                                $10,000,000
Less Premiums going out from the reinsured for 1st Surplus, 2nd surplus, Fac = $ 4,000,000
GNPI                                                                                                                                  = $ 6,000,000

GNPI forms the base premium for calculating the price of most X/L’s

Stop Loss would normally be based on Net Premium 

GNPI in reality is normally the same as or very similar to the Retained premium, unless the X/L is for Common Account e.g. Reinsured ABC Ins Co and their Quota Share Reinsurers

When discussing G.N.P.I it is important to consider (and specify on the offer) whether it is to be based on Written, Earned or possibly even Accounted premium income (Retrocession). Could make a major difference to the amount actually paid for the Cover being given.

GNWPI – Written. The premiums for risk that have inception dates in this year. It is the premium written for the year not necessarily written during the year

GNAPI – Accounted. The premiums for all risks irrespective of inception date risk that have been accounted in this year.

GNEPI – Earned. The premiums applicable for the period each risk has exposed the reinsurance.  i.e. taking into account UPR

Minimum and Deposit Premium
Self explanatory
– often payable quarterly in advance – e.g. 1/1, 1/4 1/7, 1/10
 – often 90% of the actual likely finally adjusted premium – depending on the state of the reinsurance market place (80% – 100%)

Premium Adjustment  – X/L
– the amount due after the end of the year when the final “GNPI” is known
– subject to the Minimum /Deposit Premium

Proportional Premium Terminology
Written Premium – the premium ceded to a proportional Treaty
Earned Premium – the premium ceded to the proportional Treaty taking into account an amount for UPR (Unearned Premium Reserve)
Original Gross Premium (OGP) or Original Gross Rate (OGR)
– the premium ceded to the proportional reinsurance is based on the same premium as paid by the insured
Original Net Premium (ONP) or Original Net Rate (ONR)
– the premium ceded to the proportional reinsurance is NOT based on the same premium as paid by the insured – some entity has deducted local commission or local brokerage before the premiums are passed onto reinsurers. Two important questions for Underwriters. What is OGP (OGR) ? Who has taken the difference ?  – local agent or the broker ?

PREMIUM RESERVE DEPOSIT: In certain countries there is a legal requirement for insurance companies to withhold a percentage of their ceded premiums to ensure that overseas reinsurers fulfil their contractual obligations. Reserves are often released one year after being withheld. The insurance company would pay reinsurers a notional rate of interest as compensation for withholding such a deposit. Sometimes held only on the 1st, 2nd and 3rd quarterly accounts and all released to the reinsurer at the end of the 4th Quarter.

PRICING (Reinsurance) Determination of the Premium due under a Non-Proportional Reinsurance Contract.
Three Core methods.
Exposure Rating (Based on mathematically  devised scales)
Burning Cost (Based on the Loss Ratio of the contract)
Probability (Based on the probable chance of a loss or losses in any given period of time)

PRIMARY INSURER Insurer who arranges an insurance policy with an insured

PRIMARY LAYER In a scenario where an insurance is placed with different insurers and in layers this would be the bottom layer thus picking up the majority of losses. The layers above would be referred to as Excess Layers

PRIORITY  – See “Deductible”

PROBABLE OR POSSIBLE MAXIMUM LOSS (PML) The likely amount which might arise from a loss affecting a single identified risk.

Because of possible confusion re the meaning of the initials it is essential that the words be used not just the initials

N.B. Probable Maximum Loss assessments are used by Insurers to ascertain their optimum purchase of catastrophe excess of loss.
2 examples of definitions (Swiss Re’s) follow

MPL (Max Possible Loss)
Is the largest possible loss that may occur, IF, the most unfavourable circumstances being more or less exceptionally combined, a fire can not be fought or fought adequately, or is only stopped by an insurmountable obstacle or goes out though lack of substance – pessimistic

EML (Estimated Max Loss)
The size of loss that can affect the buildings in question under normal circumstances of operation, use and loss prevention e.g. intervention of the fire brigade, operation of fixed extinguishing installations, no account being taken of exceptional circumstances (accident or unforeseen events) which could affect the course of the fire – more optimistic

PRODUCTS LIABILITY INSURANCE:   Provides protection against claims arising out of the use, handling or consumption of a product.

PROFESSIONAL LIABILITY INSURANCE:   Liability insurance to indemnify professionals, doctors, lawyers, architects, etc. for the loss or expense resulting from claim on account of bodily injuries because of any malpractice, error or mistake committed or alleged to have been committed by the insured in his profession.

An underwriter whose business is confined solely to reinsurance and the peripheral services offered by a reinsures to its customers, as opposed to a primary insurer who exchanges reinsurance or operate a reinsurance department as an adjunct to its basic business of primary insurance.

PROFIT AND LOSS STATEMENT (P AND L) A statement of the financial position of the (re)insured as presented in their Annual Accounts to shareholders)
(Reinsurance) A statement drawn up periodically by a reinsured in accordance with the contract terms to ascertain if a Profit Commission is due.

Additional commission paid to the reinsured if as per the specified formula the reinsurer is deemed to have made a profit
 – will include an item for Management Expenses (also called Reinsurers Expenses) often around 5% of the Written Premium to the contract. This forms part of the formulae only. It is a loading on the Debit side of the P/C. In reality it means that a P/C will not be payable unless the Treaty makes a profit of at least 5% of the Treaties Written Premium.
– will include a provision for any deficits on one year to be carried forward to the following year or years (2, 3, 5, extinction)

Deficit carried forward 3 years good for the reinsured, deficits to extinction good for the reinsurer (in a soft market after a major loss, often re-negotiated after a few years)
e.g. 2011 Thai Floods, by 2015 many P/C’s re-negotiated and Flood Loss ignored.
N.B. In a soft market P/C’s might be seen on X/L Contracts (in reality a disguised Rate Reduction)

PROPERTY DAMAGE (LIABILITY) INSURANCE:   Protection against liability for damage to the property of another not in the care, custody and control of the insured, as distinguished from liability for bodily injury.

PROPERTY INSURANCE:   Insurance which indemnifies a person with an interest in physical property for its loss or the loss of its income-producing ability. In other words, items of property or material assets are insured against loss and damage and possibly the economic consequences thereof.

PROPORTIONAL REINSURANCE: All sharing forms of reinsurance whereby the reinsurer participates proportionately in all premiums and losses dependent upon the allocation of the original risk, whether ceded to a treaty or a facultative placement.
e.g. Sum Insured 1,000,000. Retain 100,000, Reinsure 900,000
Risk, Premium, Claims allocated 10% to reinsured (100,000/1,000,000), 90% to reinsurers (900,000/1,000,000)
Proportional Reinsurance can apply to individual risks/policies (Facultative) or blocks of risks over a period of time (Treaty). The different types of  proportional Treaty are

Quota Share – share of all risks
Surplus – share of risks larger than the retention only
Facultative Obligatory – share of risks larger than the retention only IF the reinsured decides to cede (give) the risk to the Treaty

PROPOSAL FORM A form prepared by insurer which the prospective insured completes when applying for a quotation for insurance

PRO-RATA REINSURANCE   – See “Proportional Reinsurance”.

PROSPECTIVE RATING (Reinsurance) Pricing a contract at the start of the period, with no future knowledge. (See also Retrospective Rating, pricing a contract with hindsight e.g. Burning Cost/Swing Rate)

Notice given by one party to the other under a continuous contract (normally a Proportional Treaty) to enable renegotiation of terms etc at the renewal. Whether such a concept “Provisional” is actually acceptable legally is discussed quite regularly.

PRIORITY(See Deductible)

PROXIMATE CAUSE:   An English Legal concept for ascertaining the effective cause of loss or damage.
It is an unbroken chain of cause and effect between the occurrence of an insured peril or a negligent act and resulting injury or damage. e.g. Earthquake causes a candle to fall on the floor in house A and sets it on Fire, sparks from this fire are carried to a house further down the road (House B) by a wind and B is destroyed by Fire. What is the proximate cause of the damage to House B. Earthquake!

PUBLC LIABILTIY Legal liability for death, bodily injury and disease to members of the “public”

PUNITIVE DAMAGES Damages awarded by a Court in addition to actual damages for Pain and Suffering….. e.g. Where a manufacturer totally ignored warnings that their product in certain circumstances, could cause injury, also referred to as Extra Contractual Obligations (ECO).

PURE BURNING COST= Burning Cost NOT loaded for profit and expenses

[1] e.g. Insurance Institute of Australia (1985)