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🤝 '''Co-insurance''' is a risk-sharing arrangement in which two or more [[Definition:Insurance carrier | insurance carriers]] jointly underwrite a single policy, each assuming a specified percentage of the total [[Definition:Risk | risk]]. Unlike [[Definition:Reinsurance | reinsurance]], where one insurer transfers part of its exposure to another after the fact, co-insurance involves multiple insurers appearing on the same original policy from inception, each directly liable to the [[Definition:Policyholder | policyholder]] for their agreed share. This structure is particularly common in large [[Definition:Commercial lines | commercial lines]] placements — property portfolios, major construction projects, and complex [[Definition:Liability insurance | liability]] programs — where a single carrier may be unwilling or unable to absorb the full exposure on its own.

⚙️ In practice, one insurer typically serves as the [[Definition:Lead insurer | lead insurer]], setting the [[Definition:Policy terms and conditions | terms, conditions]], and [[Definition:Premium rate | premium rate]] for the placement, while following co-insurers subscribe to specific percentages of the risk on those same terms. The lead handles claims administration and day-to-day policy servicing, and each co-insurer pays its proportionate share of any [[Definition:Claim | claim]]. In the [[Definition:Lloyd's of London | Lloyd's]] market, co-insurance functions through the [[Definition:Subscription market | subscription model]], where multiple [[Definition:Lloyd's syndicate | syndicates]] each take a line on a [[Definition:Slip | slip]]. Outside Lloyd's, brokers often arrange co-insurance panels in markets where capacity for large or unusual risks is fragmented across several carriers.

💡 For insurers, co-insurance offers a disciplined way to participate in attractive business without concentrating too much [[Definition:Underwriting risk | underwriting risk]] on a single balance sheet, which supports sound [[Definition:Capital management | capital management]] and regulatory [[Definition:Solvency | solvency]] requirements. For [[Definition:Insurance broker | brokers]] and their clients, assembling a co-insurance panel can unlock capacity that no single carrier would provide alone, while still delivering one unified policy rather than a patchwork of separate contracts. The arrangement does, however, demand clear coordination — particularly around [[Definition:Claims handling | claims handling]] and policy amendments — because disagreements among co-insurers can slow resolution and create friction for the insured.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Reinsurance]]
* [[Definition:Subscription market]]
* [[Definition:Lead insurer]]
* [[Definition:Lloyd's syndicate]]
* [[Definition:Commercial lines]]
* [[Definition:Risk sharing]]
{{Div col end}}

Definition:Co-insurance - Revision history

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