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📋 '''Line (share of risk)''' refers to the proportion or percentage of a risk that an individual [[Definition:Underwriter | underwriter]] or [[Definition:Insurance carrier | insurer]] agrees to accept on a given policy or contract. The term is most closely associated with [[Definition:Lloyd's of London | Lloyd's of London]] and the broader [[Definition:Subscription market | subscription market]], where multiple underwriters each take a "line" on a slip, collectively building up to the full placement of a risk. In this context, a line might represent, say, 10% or 25% of the total [[Definition:Sum insured | sum insured]], with the underwriter's [[Definition:Premium | premium]] income and [[Definition:Claims | claims]] liability proportional to that share. While the subscription model is characteristic of Lloyd's and the London market, analogous practices exist wherever risks are shared among multiple parties — such as [[Definition:Coinsurance | coinsurance]] arrangements in Continental European and Asian markets.

⚙️ When a [[Definition:Broker | broker]] presents a risk to the market, the lead underwriter typically sets the terms, conditions, and pricing, then "writes a line" — committing to a stated percentage of the risk on the [[Definition:Slip | slip]] or placing document. Following underwriters review the lead's terms and decide how large a line they are willing to take. The process continues until the slip reaches 100% — meaning the risk is fully subscribed. If demand is strong, the slip may become oversubscribed, and lines are scaled back proportionally through a mechanism known as [[Definition:Signing down | signing down]]. Each underwriter's financial exposure — both the [[Definition:Premium | premium]] receivable and the potential [[Definition:Loss | loss]] payable — is strictly limited to its written line. This structure distributes risk across multiple balance sheets and allows individual underwriters to manage their [[Definition:Aggregation | aggregation]] and [[Definition:Capacity | capacity]] with precision.

💡 The concept of writing lines is foundational to how large, complex, or catastrophic risks find adequate [[Definition:Insurance capacity | capacity]] in the global market. Without the ability to divide a single risk among many participants, few individual insurers would have the appetite or the capital to cover exposures such as offshore energy platforms, satellite launches, or multinational liability programs. For brokers, understanding how lines are allocated — and which underwriters are willing to lead versus follow — is a core skill in effective [[Definition:Placement | placement]] strategy. The line structure also has regulatory and accounting implications: each participant must reserve and report its share independently, a requirement that holds under both [[Definition:Solvency II | Solvency II]] in Europe and [[Definition:Risk-based capital (RBC) | risk-based capital]] frameworks elsewhere.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Subscription market]]
* [[Definition:Slip]]
* [[Definition:Coinsurance]]
* [[Definition:Signing down]]
* [[Definition:Lead underwriter]]
* [[Definition:Insurance capacity]]
{{Div col end}}

Definition:Line (share of risk) - Revision history

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