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{{Quote of the day}} |
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'''Did you know?''' |
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== Skill-building book summaries == |
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''Looking to grow your skills? Start with our latest book summaries:'' |
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| 0 = {{:Definition:Bordereaux}} |
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| 1 = {{:Definition:Burning cost}} |
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{{div 2cols}} |
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| 2 = {{:Definition:Commutation (reinsurance)}} |
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| 3 = {{:Definition:Finite reinsurance}} |
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🌱 [[Tiny habits (2019) – BJ Fogg]]. Start absurdly small and celebrate to rewire behaviour. |
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| 4 = {{:Definition:Fronting}} |
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| 5 = {{:Definition:Follow-the-fortunes}} |
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⚛️ [[Atomic habits (2018) – James Clear]]. Compound small improvements with clear systems. |
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| 6 = {{:Definition:Cut-through clause}} |
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| 7 = {{:Definition:Binding authority}} |
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💥[[The power of habit (2012) – Charles Duhigg]]. Use cue–routine–reward to change outcomes. |
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| 8 = {{:Definition:Clash cover}} |
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| 9 = {{:Definition:Attachment point}} |
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🥂 [[Never eat alone (2005) – Keith Ferrazzi and Tahl Raz]]. Build relationships with consistent, generous outreach. |
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| 10 = {{:Definition:Exhaustion point}} |
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| 11 = {{:Definition:Reinstatement premium}} |
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✅ [[Getting things done (2001) – David Allen]]. Capture and clarify to achieve stress-free productivity. |
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| 12 = {{:Definition:Sliding-scale commission}} |
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| 13 = {{:Definition:Profit commission}} |
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🤗 [[How to win friends and influence people (1936) – Dale Carnegie]]. Use timeless rules for rapport and persuasion. |
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| 14 = {{:Definition:Loss portfolio transfer}} |
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| 15 = {{:Definition:Adverse development cover (ADC)}} |
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Or more [[Essential skill-building books]] |
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| 16 = {{:Definition:Aggregate excess-of-loss reinsurance}} |
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| 17 = {{:Definition:Catastrophe excess-of-loss reinsurance}} |
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{{div col end}} |
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| 18 = {{:Definition:Per-risk excess of loss reinsurance}} |
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| 19 = {{:Definition:Risks-attaching basis}} |
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| 20 = {{:Definition:Losses-occurring basis}} |
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| 21 = {{:Definition:Claims-made trigger}} |
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| 22 = {{:Definition:Signing down}} |
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| 23 = {{:Definition:Sunset clause}} |
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| 24 = {{:Definition:Utmost good faith}} |
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| 25 = {{:Definition:Contra proferentem}} |
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| 26 = {{:Definition:Incurred but not reported (IBNR)}} |
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| 27 = {{:Definition:Bornhuetter-Ferguson method}} |
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| 28 = {{:Definition:Chain-ladder method}} |
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| 29 = {{:Definition:Stochastic reserving}} |
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| 30 = {{:Definition:Loss development triangle}} |
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| 31 = {{:Definition:Credibility factor}} |
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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?
🔒 Industry loss warranty (ILW) is a reinsurance or financial market instrument that pays out when total industry losses from a specified event exceed a predetermined threshold. Unlike traditional reinsurance, which indemnifies a cedent based on its own actual losses, an ILW uses an objective, market-wide loss index — typically reported by PCS or a comparable authority — as its primary trigger. Most ILWs also include a dual-trigger structure requiring the buyer to demonstrate that it sustained a minimum level of loss itself, ensuring there is a genuine economic interest underlying the contract.
⚙️ In practice, an ILW transaction begins with the buyer (usually a reinsurer or large insurer) selecting a coverage layer defined by an industry loss attachment point — for example, $50 billion in U.S. hurricane losses. If the reported industry loss from a qualifying event reaches or exceeds that figure, and the buyer meets its own loss warranty, the contract pays the agreed amount. ILWs can be structured as either reinsurance contracts or as derivatives traded in the capital markets, and they are available on a per-occurrence or aggregate annual basis. Settlement depends on the official industry loss determination, which can take months to finalize as claims develop and IBNR estimates stabilize.
📈 ILWs occupy a valuable niche because they combine speed of execution with simplicity. Buyers can secure large amounts of catastrophe protection relatively quickly, often with less disclosure than a traditional excess-of-loss placement requires, since the payout depends on a public index rather than granular portfolio data. For sellers — including hedge funds, ILS funds, and traditional reinsurers — ILWs offer diversified catastrophe exposure without the complexity of individual company underwriting analysis. However, ILWs carry basis risk: the possibility that industry losses trigger a payout while the buyer's own losses remain modest, or vice versa. Managing this basis risk is central to how sophisticated buyers incorporate ILWs into their broader reinsurance programs.
Related concepts