https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AFirm_order 2026-05-02T18:26:05Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Firm_order&diff=18736&oldid=prev 2026-03-16T08:51:32Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📝 &#039;&#039;&#039;Firm order&#039;&#039;&#039; is a binding commitment by a [[Definition:Reinsurer | reinsurer]] or [[Definition:Underwriter | underwriter]] to accept a specified share of a [[Definition:Reinsurance | reinsurance]] placement or [[Definition:Insurance | insurance]] risk at agreed terms and pricing, distinguishing it from a mere indication of interest or a conditional quote. In the [[Definition:Lloyd&#039;s of London | Lloyd&#039;s]] and London market context, a firm order typically represents the point at which a [[Definition:Reinsurance broker | broker]] secures a written-down commitment on a [[Definition:Slip | slip]] or equivalent placement record, signifying that the participating market has moved beyond negotiation to a contractual pledge. The concept is equally relevant in global [[Definition:Treaty reinsurance | treaty]] and [[Definition:Facultative reinsurance | facultative]] placements, where clarity about which commitments are binding and which remain indicative is essential to orderly market functioning.<br /> <br /> ⚙️ During a typical placement process, a broker approaches potential markets with a risk submission, and underwriters may initially respond with soft indications — expressions of interest subject to further review, internal approvals, or changes in terms. A firm order crystallises when the underwriter confirms participation at a defined [[Definition:Premium | premium]] rate, set of [[Definition:Terms and conditions | terms and conditions]], and specified percentage share, usually documented by scratching a slip, issuing a firm-order confirmation, or executing an electronic equivalent on platforms like [[Definition:Placing Platform Limited (PPL) | PPL]]. Once a firm order is given, the underwriter is generally bound to honour that commitment, and the broker can count the capacity toward completing the placement. In some jurisdictions and market customs, withdrawing a firm order without cause can carry reputational or even legal consequences, reinforcing the weight that attaches to the distinction between indicative and firm commitments.<br /> <br /> 🤝 The reliability of firm orders underpins trust across the insurance and reinsurance value chain. [[Definition:Cedant | Cedants]] and their brokers depend on the certainty that subscribed capacity will be honoured when a program is finalised, particularly for complex multi-market placements that may involve dozens of participating [[Definition:Syndicate | syndicates]] or companies across London, Continental Europe, Bermuda, and Asia. Ambiguity around whether an order is truly firm can lead to overplacement, shortfalls, or disputes at [[Definition:Inception | inception]] — all of which introduce friction and erode confidence. As electronic placement platforms and digitised workflows become more prevalent, the mechanics of recording and validating firm orders are evolving, but the underlying principle remains unchanged: a firm order is a market participant&#039;s word, and honouring it is foundational to how risk transfer markets operate.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Slip]]<br /> * [[Definition:Indication]]<br /> * [[Definition:Placing]]<br /> * [[Definition:Subscription market]]<br /> * [[Definition:Binding authority agreement]]<br /> * [[Definition:Written line]]<br /> {{Div col end}}</div>

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