1. English for the Insurance Business
Avv. Carlo Galantini
Studio Legale Galantini Heibron Cocco-ordini
Milano

2. What is insurance

3. How insurance handles risk
Underwriting
Assessment
Statistics
Acceptance, exclusion, declinature
Quotation of price
Handling of funds
Investment
Solvency margin
Indemnification
Assessing the damage
Insured peril
Proximate cause
subrogation

4. Essential features of Insurance
Possible to calculate chance of loss
Capable of financial measurement
Loss must be fortuitous
Insurable interest
Utmost good faith
Not against public interest
Loss must not be catastrophic

5. Law of large numbers
As the number of exposure units increases, the more certain it is that actual loss experience will equal probable loss experience

6. Insurable Interest
MUST BE some property, rights, interest, life, limb, or potential liability capable of being insured
This MUST BE the subject matter of the insurance
Insured MUST benefit from its safety and be prejudiced by its loss or damage (equivalent terms used for liability)
The relationship between the insured and the subject matter MUST BE recognised at law

7. Utmost good faith Definition of a material fact
Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk

8. Some facts requiring disclosure
Marine
Type of cargo
Carried on deck
Sailing near war zone
Life
Medical history
Hazardous pursuits

9. Principle of indemnity
The insured shall be placed by the insurer in the same financial position after the loss as he occupied immediately before the loss

10. Proximate cause
If an excluded or uninsured peril caused the loss there will be no cover

11. Subrogation
The right of a person to stand in the place of another and avail himself or herself of all the rights and remedies of that person
Insurer indemnifies
Then they have the right to recoup their money through the courts

12. Types of insurance
Marine
Fire
Life & accident

13. Types of insurance Insurance of the person Insurance of property
Insurance of liability
Insurance of interest

14. Types of insurance
Every individual or organisation can incur liabilities if others suffer loss to person or property through their careless or negligent acts, defects in their property or goods supplied to them.

15. Liability Public liability Personal liability Employers’ liability
Professional liability
Products liability

16. Functions of reinsurance
Additional capacity
Protects against catastrophical events
Stabilise results
Financial support
Market intelligence
Advice direct insurer
Improve the margins

17. Reinsurance
Proposer Original
Insured

18. Reinsurance
Cession
Retention

19. Reinsurance
Facultative Reinsurance
Treaty Reinsurance

20. The London Market What?
World’s leading market for internationally traded insurance & reinsurance
Entirely non-life
Emphasis on high cost, high risk, unusual risk
Largely a “subscription market” (handled by brokers)

21. The London Market The Players
ILU
LIRMA
Fringe companies & contact offices
Protection & Indemnity (P&I) Clubs & other mutuals
Pools
Lloyd’s
Brokers

22. LLOYD’S
Edward Lloyd’s coffee house
Clientele
Function
business

23. LLOYD’S Today Marketplace Names Syndicates Managing agents Brokers
Room

24. LLOYD’S Broker A Lloyd’s accredited broker Present a “slip”
A leading underwriter = specialised in a field
Every underwriter takes a lead
Business is struck in utmost good faith

25. LLOYD’S Members Names Corporate members Managing agents
Unlimited liability
Working Names
External Names
Corporate members
1994
Funds
Liability (liable to the full extent of their assets – liability of shareholders is limited to their share)
Managing agents

26. Names The “storm” Catastrophes Asbestosis (employers’ liability)
LMX-spiral (excess of loss reinsurance)

27. LLOYD’S After the storm
Decrease in syndicates and Names
Larger syndicates
No longer unlimited liability obligation
Introduction and steady increase of corporate capital
An increased level of capacity

28. LLOYD’S Lloyd’s security
Premium Trust Fund
Members’ fund
Names’ assets & corporate members’ assets
Stop loss fund
Lloyd’s Central Fund
Net assets of the Corporation of Lloyd’s