Pecuniary loss. Export and trade credit insurance
In 1990 the Pecuniary Loss Working Party presented a paper to the General Insurance Convention which covered mortgage indemnity insurance. Several areas of possible further investigation were highlighted. This year the working party has endeavoured to pursue these, and to investigate other aspects of pecuniary loss insurance. In the event, only one aspect of mortgage indemnity has been pursued - that of building a model to assist in the pricing of and reserving for this type of business. What constitutes pecuniary loss is not clearly defined. We have taken it to mean any insurances which mitigate financial loss - the inability to collect from one's debtors or the obligation to fulfill a guarantee or warranty. These do not necessarily fall into the DTI accounting class for miscellaneous financial loss, while we would not regard all business so classified as our province. For example consequential loss insurance would more sensibly be reviewed by a group looking at commercial fire. Two other areas have also been investiaged this year. A report on creditor insurance has been prepared, which gives what we hope is a full introduction to this type of insurance. The last two subjects which have been tackled are trade indemnity and export credit insurance.