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🏗️ '''Programme design''' is the discipline of structuring a [[Definition:Programme | programme]] of [[Definition:Insurance policy | insurance]] or [[Definition:Reinsurance | reinsurance]] coverage so that the layers, limits, [[Definition:Retention | retentions]], and participating [[Definition:Insurance carrier | carriers]] collectively match a client's or [[Definition:Cedent | cedent's]] risk profile, [[Definition:Risk appetite | risk appetite]], and budget. It sits at the intersection of technical risk analysis and market strategy: the designer must understand both the underlying exposure and which markets have the appetite, capacity, and pricing to fill each piece of the structure.

📐 In practice, programme design begins with a thorough analysis of the risks to be covered — informed by [[Definition:Loss history | loss history]], [[Definition:Catastrophe model | catastrophe modelling]] outputs, contractual obligations, and regulatory requirements. From there, the designer — usually a [[Definition:Insurance broker | broker]] or [[Definition:Risk manager | risk manager]], sometimes supported by [[Definition:Actuarial science | actuaries]] — decides on the [[Definition:Self-insured retention (SIR) | self-insured retention]] or [[Definition:Deductible | deductible]] the insured will absorb, the [[Definition:Primary insurance | primary layer]] limit, and how many [[Definition:Excess layer | excess layers]] are needed to reach the desired total [[Definition:Policy limit | limit of liability]]. Key decisions include whether to use a single-carrier approach or distribute risk across a panel, whether to incorporate [[Definition:Captive insurance | captive]] vehicles for certain retentions, and whether [[Definition:Alternative risk transfer | alternative risk transfer]] instruments like [[Definition:Insurance-linked securities (ILS) | ILS]] should complement traditional placements. In multinational programmes, the design must also address [[Definition:Admitted insurance | local admitted]] requirements, [[Definition:Fronting | fronting]] arrangements, and the interaction between a [[Definition:Master policy | master policy]] and local policies — a challenge that intensifies in markets such as Brazil, India, and China, where [[Definition:Non-admitted insurance | non-admitted]] coverage faces strict limitations.

💡 Thoughtful programme design can be the difference between a client having seamless, comprehensive protection and one that discovers ruinous gaps at the moment of a major [[Definition:Claim | claim]]. A poorly designed programme might leave a layer uninsured because two carriers' wordings define the [[Definition:Attachment point | attachment point]] differently, or it might concentrate too much capacity with a single counterparty that later faces [[Definition:Insolvency | insolvency]]. Conversely, an elegantly designed programme optimizes the cost of risk transfer by placing each layer with the carrier best suited to price it competitively, uses structured [[Definition:Deductible | deductibles]] to incentivize loss prevention, and builds in flexibility for mid-term adjustments as the client's operations evolve. As data quality and [[Definition:Analytics | analytics]] capabilities improve — particularly through [[Definition:Insurtech | insurtech]] platforms that model programme options dynamically — the design process is becoming more quantitative and iterative, though the judgment of experienced brokers and underwriters remains indispensable.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Programme]]
* [[Definition:Excess layer]]
* [[Definition:Attachment point]]
* [[Definition:Self-insured retention (SIR)]]
* [[Definition:Fronting]]
* [[Definition:Tower of insurance]]
{{Div col end}}

Definition:Programme design - Revision history

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