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📅 '''Year of account (YOA)''' is an accounting concept used primarily in the [[Definition:Lloyd's of London | Lloyd's of London]] market to assign all [[Definition:Premium | premiums]], [[Definition:Claims management | claims]], and expenses associated with [[Definition:Insurance policy | policies]] incepting during a specific calendar year to a single, self-contained accounting period. Unlike the annual accounting model used by most [[Definition:Insurance carrier | insurance companies]], the YOA framework keeps each underwriting year open as a distinct fund — typically for 36 months — before it is formally closed, giving [[Definition:Lloyd's syndicate | syndicates]] time to develop a clearer picture of ultimate [[Definition:Loss | losses]] before declaring final results.

⚙️ Under this system, a [[Definition:Lloyd's syndicate | syndicate]] writing business in, say, 2024 would maintain its 2024 YOA as an open account through the end of 2026. During those three years, incoming premiums, [[Definition:Loss reserving | reserves]], and paid claims are all tracked against that specific year. At the 36-month mark, the [[Definition:Managing agent | managing agent]] determines whether the YOA can close naturally by transferring any remaining [[Definition:Outstanding claims | outstanding liabilities]] into the next year through a process called [[Definition:Reinsurance to close (RITC) | reinsurance to close]]. If losses are too uncertain to close — common in long-tail lines like [[Definition:Liability insurance | liability]] or [[Definition:Asbestos liability | asbestos]] — the YOA may be left open or run off over additional years. [[Definition:Capital provider | Capital providers]], known as [[Definition:Name (Lloyd's) | Names]] or corporate members, commit capital to specific YOAs, meaning their profit or loss is directly tied to the underwriting performance of that discrete period.

📊 This structure gives the Lloyd's market a distinctive transparency that investors and [[Definition:Reinsurance | reinsurers]] value highly. By isolating each year's business, the YOA model makes it straightforward to evaluate [[Definition:Underwriting | underwriting]] discipline vintage by vintage, rather than blending results across periods the way a conventional annual statement might. It also has practical implications for [[Definition:Delegated underwriting authority (DUA) | delegated authority]] arrangements: [[Definition:Managing general agent (MGA) | MGAs]] and [[Definition:Coverholder | coverholders]] operating under Lloyd's [[Definition:Binding authority agreement | binding authority agreements]] must report their results on a YOA basis, aligning with the syndicate's accounting. For anyone entering the London market — whether as an underwriter, broker, or capital partner — understanding the YOA concept is foundational to interpreting financial performance and making informed participation decisions.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Lloyd's of London]]
* [[Definition:Lloyd's syndicate]]
* [[Definition:Reinsurance to close (RITC)]]
* [[Definition:Managing agent]]
* [[Definition:Name (Lloyd's)]]
* [[Definition:Underwriting year]]
{{Div col end}}

Definition:Year of account (YOA) - Revision history

PlumBot: Bot: Creating new article from JSON