long-term commitment

BASIC INFORMATION REQUIRED FOR THE ASSESSMENT OF TREATY PROPOSALS

1. Ceding Company:

    • Most recent annual report of ceding company
    • Full name and address
    • History of company
    • Information on products
    • Market share
    • Number of employees
    • Possible rating by Standard & Poor’s, AM Best, Moody’s, and/or Fitch
    • Any brochures available

2. Contract:

    • Type of contract (Quota Share, Excess of Loss, Surplus, etc.)
    • Limits per risk and per bond (basic and special limits)
    • Retention (gross and net e.g. retention covered by X/L)
    • Other conditions e.g. commission, profit commission, management expenses, etc.
    • Exclusions
    • Treaty wording including a description of anyone risk, etc.
    • Statistics of previous years showing premium income and losses (paid and outstanding)
    • Name(s) of leading re-insurer(s) and other re-insurers that take part in this contract or to whom this contract has been offered
    • Most recent premium volume, preferably broken down per type of business
    • Description of present portfolio e.g.;
      • for a bond treaty; a breakdown in performance bonds, maintenance bonds, etc.
      • for a credit treaty; a breakdown in sectors e.g. food & drink, tobacco, textiles, etc.

3. Risks:

    • A full description of the type of risks to be covered plus an indication of the average and/or maximum duration of the risks
    • A breakdown of the number of risks according to assured amount e.g.
LIMIT NUMBER OF CLIENTS
For credit treaty number of buyers
0 – 100.000 X
100.001 – 200.000 Y
200.001 – 500.000 Z
etc.

4. Details about Underwriter(s):

    • Number of underwriters employed by ceding company
    • A description of the experience of the underwriter(s) plus, if possible, information about results from his/her previous positions

5. Underwriting Guidelines:

    • Premium rates (if possible per type of bond)
    • What are the target markets/sectors?
    • What are the markets / sectors to be avoided?
    • Are clients visited by underwriters?
    • Financial analysis of risks: how does ceding company assess such an analysis?
    • What are minimum requirements e.g. solvency, equity, etc.
    • Definition “any one risk”
    • Underwriting procedures (e.g. credit committee)
    • Regarding credit insurance: Percentage of coverage/ Use-factors/ Waiting periods
    • Policy of ceding company regarding counter guarantees/collateral (what kind)?
      • are these signed by risk company and/or mother company of risk company?

6. Projections of coming years:

    • Expected premium volume for next 3 years in numbers
    • Market share & strategy
    • Growth expectations (in what area, which sectors, etc.)