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)


UBERRIMAE FIDEI See Utmost Good Faith

The sum or sums paid by the cedant in settlement of all losses arising out of one event, including any litigation or other expenses incurred in connection therewith, but excluding any charge for the services of any salaried employee of the cedant in connection with the investigation of claims. From the aggregate cost of such claims, there must be deducted all recoveries, whether by way of salvage or otherwise, and all sums recoverable under other reinsurances which may inure to the benefit of the treaty, irrespective of whether or not such reinsurances are actually recovered.
Ultimate Net Loss: The total loss suffered by the reinsured for its net retained account after all prior (inuring) reinsurance recoveries have been made.

UMBRELLA COVER (Reinsurance)
An excess of loss treaty effected to protect a Reinsured against accumulation of the net loss from a single event or series of events affecting a number of classes of business and differing reinsurance programmes after the operation of all more specific reinsurances of the individual classes.
e.g. 1 fire hitting Risk X/L, Catastrophe X/L, Engineering X/L, Marine Cargo X/L.
If losses exceed the amount of cover bought AND the accumulation of these losses from more than one programme exceeds the deductible of the Umbrella Cover – there is a claim. see also Clash Cover – similar but not the same. Pays for the accumulation of deductibles of various programmes from one event loss.

UMBRELLA LIABILITY POLICY:   A liability policy designed to provide liability protection above and beyond that provided by standard liability contracts.

UNBALANCED An expression used in Proportional Treaties, especially in Surplus and Facultative Obligatory contracts, where the Balance is seen to be not particularly good or even poor. Balance reflects the ratio of Treaty Limit (for 1 risk)/Estimated Premium Income (for all risks)
e.g. Retention $1,000,000
10 Line Surplus Limit $10,000,000
Estimated Premium Income $500,000 = Balance $10,000,000/$500,000 = 20:1
1 total loss and reinsurers have lost their money for 20 years, minimum
e.g. Retention $1,000,000
10 Line Surplus Limit $10,000,000
Estimated Premium Income $2,500,000 = Balance $10,000,000/$2,500,000 = 4:1
1 total loss and reinsurers have lost their money for 4 years, minimum

UNDER-INSURANCE:   A condition in which not enough insurance is carried to cover the insurable value, and, especially, to satisfy a coinsurance clause.

A word sometimes used as a synonym for “Deductible”. Contracts that fall below “this” one.

An individual who determines the acceptability of an insurance or reinsurance risk and determines the premium and specific terms and conditions for that risk.
–  originally someone who signed the deal at the bottom Write-Under!

Generally, the maximum amount in money that a (re)insurer is willing to accept on an offer BUT

The premium income limit that a syndicate may accept in a year e.g. “Syndicate 9999’s Capacity this year is $1,000,000,000” = it can accept $1,000,000,000 of premium this year.

The inception date of the original insurance policy decides where a loss falls not the date of loss.
A reinsurance treaty or contract may be in force until the natural expiry of all policies issued or renewed by the insurance company during a specified contract period, normally one year.
e.g. A reinsurance contract from 1 January 20XX to 31 December 20XX.

If policies are issued for twelve months and a policy is issued on 31 December 20XX, then the 20XX underwriting year would be on risk for any claims falling on this policy even if they occur “next year”.

A term used on Proportional Treaties re how risk is (or is not) transferred from one year’s reinsurers to the next. In this case all premiums and claims applicable to policies incepting during “this” year are accounted to reinsurers in “this” year.
See also Portfolios, Clean cut, Accounts Year, Accident Year/Occurrence .

See Box

That part of an insurance or reinsurance premium attributable to the unexpired portion of a risk or risks at a particular point in time. The premium for the unexpired portion of risk is called the unearned premium.  There are various methods of calculating the unearned premium, pro rata (or per diem, daily, basis), 1/24ths (half a calendar month), 1/8ths (half a calendar quarter), 1/12ths (calendar month) or at a notional figure, e.g. 50%.

(Re)insurance protection arranged without a finite monetary limit e.g. Motor Third Party bodily injury in the U.K.

UTMOST GOOD FAITH (Uberrimae Fidei) A major concept in (re)insurance in many countries of the world. It goes back centuries to where the “Insurer knows nothing about a risk whilst the (re)insured knows (is assumed to know) everything”. Thus a (re)insurer would be expected to declare all  Material Facts to the underwriter and if they did not the (re)insurer would be entitled to avoid the contract. This has been seen as unfair on policy holders and possibly quite draconian. In the UK this principal was modified in 2016 basically insisting the (re)insurer needs to be very clear that they ask the Q’s that they want answers to, not relying on the (reinsured) to tell them.


A Quota Share Treaty where the amount ceded can vary depending on the Class of Risk

VERTICALISATON– See Non-Subscription Placement.


Words used by an underwriter to endeavour to ensure that at the point of accepting the risk (after inception of the contract) that they are not liable for any losses that have already occurred.



WARRANTY: A very strict condition in an insurance policy or reinsurance treaty or contract imposed by the insurer or reinsurer. A warranty states that something should or should not be done, or that a condition should be fulfilled. A warranty might also be confirmation or denial of a statement or a particular set of circumstances. There are legal remedies for breach of warranty.

WHOLE ACCOUNT (Reinsurance) A term used in reinsurance to reflect what classes are being covered by the specific reinsurance contract. Although the expression used is “Whole Account” in many cases this is not going to be strictly correct. It will NOT cover EVERY (whole) class underwritten. always essential to ask “What classes are covered or excluded.”

WHOLE LIFE A form of Life Assurance which pays out on the death of the Life Assured

WORKERS COMPENSATION:   (1) A schedule of benefits payable to an employee for injury, disability, dismemberment, or death as a result of occupational hazard. The payments are the responsibility of the employer. The limits would normally be imposed by Government. This is strict liability, if injured at work (or possibly on the way to work) $xx,xxx is to be paid see also Employers Liability
(2) Insurance agreeing to pay the Workers Compensation benefits required by law on behalf of the employer.

WORKING X/L (Reinsurance) Where reinsurers anticipate a regular flow of losses, might be referred to as a likely to work – have claims  e.g. Low Layer Per Risk X/L

The maximum amount an insurer or reinsurer is prepared to accept when accepting or writing a slip.
Signed Line Total lines on that slip might amount to more than 100%. In such a case the broker would sign down the placement so that the total of all lines equal 100% (or another agreed figure).
Signing down. The process of reducing down the Written Lines. There are two basic methodologies, With disproportionate signing and without disproportionate signing, with whichever version is to be used made clear on the placement slip. On a London Market Slip (MRC) this text should be in the Security Details Section. Unfortunately most brokers just show the text, not the heading.
With disproportionate signing – means that each (re)insurers share can be signed down in any way that the that the (re)insured chooses. In reality the Broker’s decision in many cases. e.g.40%, 40$, 40% = 40%, 35%, 25%
Without disproportionate signing means that each (re)insurers share will be signed down in equal proportions. e.g.33.34%, 33.33%, 33.33%.
Line to stand, Sign in Full is sometimes stated by the (re)insurer, meaning that they are requesting that their Written Line is left untouched when the Slip is signed down.

WRITTEN PREMIUM: That premium which is generated by risks issued or renewed within an identified period, normally an underwriting year. If an original policy is issued within that period, all premiums and claims are recorded in that same period, although certain premium movements and losses would occur long after the expiry of the period identified. In simple terms, everything is taken back to the period in which the original policy was issued (or renewed).


X/L  see Excess of Loss