In the Glossary under "Coinsurance", a description of the slip system is included with a statement that the lead insurer "manages the outturn". I haven't come across the term "outturn" before - does it simply means that it manages claims and payments to the insured?
Hi DanielZ Yes that's basically what it means. It means the overall outcome from writing the business. The lead insurer (or underwriter) will set the premium rates to be charged for the risk along with the other policy terms and conditions and they will manage the claims handling and payments on behalf of the following insurers who will follow suit in the agreed percentages (signed lines).
"If the risk is over-placed, this indicates that the firm order price was probably too high. Conversely, if the risk is not fully placed the firm order price was probably too low" Would you please explain what this means? It seemed to, me the firm order price should be too low and so the risk got over placed. I read through the entire section on slip system 2-3 times but I dint seem to understand this!!!
If it's over-placed then that means lots of people want to be on the slip, i.e. profitable business which could mean that it is overpriced. The converse also holds.
Yes that's right, if it is over-priced then the premiums are likely to exceed the expected claims and expenses so that the business is very profitable. Consequently, lots of insurers would like a piece of the business and it is likely to be over-subscribed/placed. If its under-priced, it isn't likely to be very popular so it probably wont be fully placed.
