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== biz/books == |
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''' |
'''Did you know?''' |
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__NOCACHE__ |
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[[sales & marketing ▸]] {{!}} |
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{{#switch: {{#expr: {{CURRENTTIMESTAMP}} mod 100}} |
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[[products ▸]] {{!}} |
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| 0 = {{:Definition:Bordereaux}} |
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[[strategy ▸]] {{!}} |
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| 1 = {{:Definition:Burning cost}} |
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| 2 = {{:Definition:Commutation (reinsurance)}} |
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'''career ▸''' {{!}} |
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| 3 = {{:Definition:Finite reinsurance}} |
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[[leadership ▸]] {{!}} |
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| 4 = {{:Definition:Fronting}} |
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[[presentation ▸]] {{!}} |
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| 5 = {{:Definition:Follow-the-fortunes}} |
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{{Inline expand | productivity ▸|{{read|[[Atomic Habits]]}} {{read|[[The 7 Habits of Highly Effective People]]}} {{read|[[The Power of Habit]]}} {{read|[[see all ▸]]}}}} {{!}} |
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| 6 = {{:Definition:Cut-through clause}} |
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[[writing ▸]] {{!}} |
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| 7 = {{:Definition:Binding authority}} |
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| 8 = {{:Definition:Clash cover}} |
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'''investing ▸''' {{!}} [[value ▸]] {{!}} [[growth ▸]] |
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| 9 = {{:Definition:Attachment point}} |
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| 10 = {{:Definition:Exhaustion point}} |
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| 11 = {{:Definition:Reinstatement premium}} |
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{{Section separator}} |
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| 12 = {{:Definition:Sliding-scale commission}} |
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| 13 = {{:Definition:Profit commission}} |
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== biz/people == |
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| 14 = {{:Definition:Loss portfolio transfer}} |
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'''CEOs ▸''' {{!}} |
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| 15 = {{:Definition:Adverse development cover (ADC)}} |
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[[CEOs of DJIA companies|DOW 30 ▸]] {{!}} |
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| 16 = {{:Definition:Aggregate excess-of-loss reinsurance}} |
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[[CEOs of Nasdaq-100 companies|Nasdaq-100 ▸]] {{!}} |
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| 17 = {{:Definition:Catastrophe excess-of-loss reinsurance}} |
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[[CEOs of FTSE 100 companies|FTSE 100 ▸]] {{!}} |
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| 18 = {{:Definition:Per-risk excess of loss reinsurance}} |
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[[CEOs of DAX companies|DAX 40 ▸]] {{!}} |
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| 19 = {{:Definition:Risks-attaching basis}} |
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[[CEOs of CAC 40 companies|CAC 40 ▸]] {{!}} |
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| 20 = {{:Definition:Losses-occurring basis}} |
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[[CEOs of EURO STOXX 50 companies|EURO STOXX 50 ▸]] {{!}} |
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| 21 = {{:Definition:Claims-made trigger}} |
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[[CEOs of SMI companies|SMI ▸]] {{!}} |
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| 22 = {{:Definition:Signing down}} |
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[[CEOs of S&P/TSX 60 companies|S&P/TSX 60 ▸]] {{!}} |
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| 23 = {{:Definition:Sunset clause}} |
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[[CEOs of NIFTY 50 companies|NIFTY 50 ▸]] {{!}} |
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| 24 = {{:Definition:Utmost good faith}} |
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[[CEOs of HSI companies|HSI ▸]] {{!}} |
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| 25 = {{:Definition:Contra proferentem}} |
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| 26 = {{:Definition:Incurred but not reported (IBNR)}} |
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'''quotes ▸''' {{!}} |
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| 27 = {{:Definition:Bornhuetter-Ferguson method}} |
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{{Inline expand |business ▸|{{read|[[Notable quotes about accounting| accounting]]}} {{read|[[Notable quotes about advertising | advertising]]}} {{read|[[Notable quotes about customers | customers]]}} {{read|[[Notable quotes about employees|employees]]}} {{read|[[Notable quotes about marketing|marketing]]}} {{read|[[Notable quotes about sales|sales]]}} {{read|[[Notable quotes about strategy|strategy]]}} {{read|[[see all ▸]]}} }} {{!}} |
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| 28 = {{:Definition:Chain-ladder method}} |
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{{Inline expand|career ▸|{{read|[[leadership]]}} {{read|[[productivity]]}} }} {{!}} |
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| 29 = {{:Definition:Stochastic reserving}} |
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{{Inline expand|investing ▸|{{read|[[value]]}} {{read|[[growth]]}} }} {{!}} |
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| 30 = {{:Definition:Loss development triangle}} |
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| 31 = {{:Definition:Credibility factor}} |
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{{Section separator}} |
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| 32 = {{:Definition:Allocated loss adjustment expense (ALAE)}} |
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| 33 = {{:Definition:Unallocated loss adjustment expense (ULAE)}} |
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| 34 = {{:Definition:Experience modification factor}} |
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| 35 = {{:Definition:Industry loss warranty (ILW)}} |
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| 36 = {{:Definition:Sidecar (reinsurance)}} |
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| 37 = {{:Definition:Collateralized reinsurance}} |
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| 38 = {{:Definition:Catastrophe bond (CAT bond)}} |
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| 39 = {{:Definition:Retrocession}} |
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| 40 = {{:Definition:Surplus share reinsurance}} |
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| 41 = {{:Definition:Surplus strain}} |
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| 42 = {{:Definition:Surplus relief}} |
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| 43 = {{:Definition:Funds withheld reinsurance}} |
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| 44 = {{:Definition:Modified coinsurance}} |
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| 45 = {{:Definition:Coinsurance penalty}} |
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| 46 = {{:Definition:Anti-concurrent causation clause}} |
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| 47 = {{:Definition:Continuous trigger}} |
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| 48 = {{:Definition:Efficient proximate cause}} |
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| 49 = {{:Definition:Horizontal exhaustion}} |
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| 50 = {{:Definition:Vertical exhaustion}} |
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| 51 = {{:Definition:Sue and labor clause}} |
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| 52 = {{:Definition:Honorable engagement clause}} |
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| 53 = {{:Definition:Hours clause}} |
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| 54 = {{:Definition:Batch clause}} |
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| 55 = {{:Definition:Aggregation clause}} |
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| 56 = {{:Definition:Omnibus clause}} |
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| 57 = {{:Definition:Running down clause}} |
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| 58 = {{:Definition:Warehouse-to-warehouse clause}} |
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| 59 = {{:Definition:General average}} |
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| 60 = {{:Definition:Particular average}} |
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| 61 = {{:Definition:Constructive total loss}} |
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| 62 = {{:Definition:York-Antwerp Rules}} |
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| 63 = {{:Definition:Protection and indemnity (P&I)}} |
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| 64 = {{:Definition:Demand surge}} |
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| 65 = {{:Definition:Social inflation}} |
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| 66 = {{:Definition:Nuclear verdict}} |
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| 67 = {{:Definition:Silent cyber}} |
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| 68 = {{:Definition:Affirmative cyber coverage}} |
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| 69 = {{:Definition:Parametric insurance}} |
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| 70 = {{:Definition:Embedded insurance}} |
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| 71 = {{:Definition:Takaful}} |
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| 72 = {{:Definition:Bancassurance}} |
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| 73 = {{:Definition:Microinsurance}} |
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| 74 = {{:Definition:Captive insurance company}} |
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| 75 = {{:Definition:Cell captive}} |
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| 76 = {{:Definition:Protected cell company (PCC)}} |
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| 77 = {{:Definition:Reciprocal insurance exchange}} |
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| 78 = {{:Definition:Risk retention group (RRG)}} |
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| 79 = {{:Definition:Lloyd's syndicate}} |
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| 80 = {{:Definition:Reinsurance to close (RITC)}} |
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| 81 = {{:Definition:Equitas}} |
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| 82 = {{:Definition:Funds at Lloyd's (FAL)}} |
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| 83 = {{:Definition:Syndicate-in-a-box (SIAB)}} |
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| 84 = {{:Definition:Part VII transfer}} |
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| 85 = {{:Definition:Solvent scheme of arrangement}} |
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| 86 = {{:Definition:Run-off (insurance)}} |
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| 87 = {{:Definition:Demutualization}} |
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| 88 = {{:Definition:Depopulation program}} |
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| 89 = {{:Definition:Probable maximum loss (PML)}} |
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| 90 = {{:Definition:Exceedance probability curve (EP curve)}} |
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| 91 = {{:Definition:Realistic disaster scenario (RDS)}} |
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| 92 = {{:Definition:Monte Carlo simulation}} |
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| 93 = {{:Definition:Copula}} |
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| 94 = {{:Definition:Bühlmann model}} |
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| 95 = {{:Definition:Cape Cod method}} |
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| 96 = {{:Definition:Extra-contractual obligation (ECO)}} |
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| 97 = {{:Definition:Loss in excess of policy limits (XPL)}} |
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| 98 = {{:Definition:Doctrine of reasonable expectations}} |
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| 99 = {{:Definition:Longevity swap}} |
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}} |
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Latest revision as of 22:46, 12 March 2026
Did you know?
🛡️ Adverse development cover (ADC) is a reinsurance contract that protects an insurer against the possibility that its existing loss reserves for claims already incurred will prove insufficient over time. Unlike traditional reinsurance that covers future losses, an ADC specifically addresses reserves that have already been established — stepping in when actual claim payments exceed the level the insurer originally anticipated. It is a form of retroactive reinsurance, meaning it covers liabilities from events that have already occurred but whose ultimate cost remains uncertain.
⚙️ Under a typical ADC arrangement, the ceding insurer selects a specific block of business or accident year and sets an attachment point — a dollar threshold above its carried reserves. If cumulative claim payments on that portfolio breach the attachment point, the reinsurer begins reimbursing the cedent up to a predetermined limit. The premium for this protection reflects the reinsurer's assessment of how likely and how severely reserves may deteriorate, informed by actuarial analysis and independent reserve studies. The contract may also include provisions governing how claims are administered and reported during the coverage period.
📊 ADCs play a critical role in stabilizing an insurer's financial position, particularly during mergers and acquisitions, corporate restructurings, or when an insurer is exiting a line of business with long-tail liability exposure. By capping downside reserve risk, the cover gives management, investors, and regulators greater confidence in the company's balance sheet. For acquirers purchasing a book of business, an ADC can make a transaction viable by ring-fencing legacy uncertainty. Rating agencies also view well-structured ADCs favorably, as they reduce earnings volatility and demonstrate prudent risk management.
Related concepts