Exposure to risk in the London Market

Document description

The aim of this discussion paper is to attempt to follow the way in which risk is assessed at various stages in the insurance process. The thread is as follows. Data is presented to an underwriter. Risk is assessed by the underwriter and the business may be accepted. Data is logged. Claims are lodged or an expectation that they will be lodged arises. More data may be collected. From this data, a requantification of the cost of the assumed risk, given that an event has/ has not occurred, is made. This data is logged and by means of extrapolation in a reserving process (by class, by whole account. by individual proportional treaty or lineslip where required) the results can be used by the underwriter as part of his assessment of the risk inherent in future business.