Definition:Slip
📋 Slip is the foundational document used in subscription insurance markets — most notably Lloyd's of London — to present a risk to potential underwriters and record their agreement to participate. It contains essential details about the insured, the coverage sought, premium indications, deductibles, terms and conditions, and the broker placing the business. Historically a physical document passed around the underwriting room, the slip has evolved into an electronic record on platforms such as PPL, though its purpose remains unchanged.
🔄 The placement process begins when a broker prepares the slip and approaches a lead underwriter, who evaluates the risk and, if willing, "scratches" the slip by writing a line — a percentage of the total risk they agree to accept along with the premium and terms. Once the lead has set the terms, the broker circulates the slip to following underwriters, who add their own lines until the risk is fully subscribed or oversubscribed. If the total exceeds 100%, signing down reduces each participant's share proportionally. The slip then serves as the contractual basis until a formal policy wording is issued.
🏛️ Far from being a mere administrative formality, the slip functions as the commercial backbone of the London and international subscription markets. The quality and clarity of a slip directly affect placement speed, underwriter confidence, and the accuracy of contract certainty — a priority that Lloyd's and regulators have emphasized in recent decades. Errors or ambiguities on the slip can lead to coverage disputes at the claims stage. The ongoing digitization of the slip process through insurtech and market modernization initiatives aims to reduce friction, improve data quality, and create structured records that feed into bordereaux and portfolio analytics.
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