Handle Share Conditions

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Share Conditions button | Share condition in SICS represents the conditions relating to the portion (often called line) a reinsurer participates with in a contract. Shares are some of the most central terms and conditions in an agreement and are used in numerous administrative functions in a company. This is also the case in SICS, where shares are used extensively in all from calculation of your part of premiums and claims to calculation of retroceded percents. Ensuring correct entry of share information is therefore crucial. |

The share information varies from one business to another, for example, with or without broker, or non-proportional or proportional treaty.

This section cover the general processes involved in recording and updating the shares of a business. If you want more details on entering shares as part of some other more specific process; like creating a new business, accepting an offer, renewing a business, placing a protection; see the section describing your particular process.

Maintain Proportional Facultative Shares #

If the business you are working on is a proportional facultative business, you can express shares either as percent or amount. For this type of business you may keep a quite comprehensive set of share conditions. For example, you can capture the original cedent’s share of the original policy, the broker’s order of the reinsurance and of course, the reinsurer’s own share.

Enter Shares Expressed as Percent #

To allocate the agreement to participants in portions of 100:

1. Open your business and click the Share (S) button in the Navigation bar.
2. If required, click the Edit button.
3. Select % (percent) from the Expressed drop-down list.
4. If relevant, enter possible orders held by other parties in the Placement display list.
5. Enter reinsurer’s share figures on the Share Figures tab. Typically, you enter the share in the row called From 100%.
6. Click OK.

For information about how to enter share conditions on outward facultative businesses, refer to Place Protection.

Enter Shares as Part of Order #

Express share as part of some other party’s order; e.g. enter your share when it has been informed as a percentage of the broker’s order.

1. Open your business and click the Share(S) button in the Navigation bar.
2. If required, click the Edit button.
3. Select % (percent) from the Expressed drop-down list.
4. In the Placement display list, enter the order (e.g. Broker’s Order) of which the share is expressed.
5. On the Share Figures tab, enter the reinsurer’s share (e.g. your share), as it is expressed on the order. That is, enter it in the row with equivalent name to the order that is in From Broker’s Order, if the order was Broker’s Order.
6. Click OK.

SICS calculates automatically Share From 100% and other share figures based on your input.

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Share Statuses #

Offered: The share proposed by a cedent to a reinsurer at offer stage.

Written: The share that the reinsurer has accepted to participate with but not necessarily confirmed by the cedent.
Estimated Signed: A share that the reinsurer anticipates will be the confirmed share.

Signed: The final and exact share of the reinsurer, confirmed by the cedent after possible sign-downs.

For further description of shares as they relate to the different life cycle statuses of a business, refer to section Handle Offer/ Quotation Process.

EXAMPLE: Orders

The example below includes limit amounts at various order levels to illustrate what the different orders represent.

Sum Insured 100% (Original Policy): 1.000.000,00

Broker’s Order: 71,43%

(Rounded figures)

EXAMPLE Reinsurer’s Shares

The calculations below demonstrate what the different shares represent. It uses the same figures as in the example for Orders.

Share From 100%: 11,2 %

(Rounded figures)

Enter Shares Expressed as Amount #

To allocate an agreement to participants as fixed monetary amounts:

1. Open your business and click the Share (S) button on the Navigation bar.
2. If needed, click the Edit button.
3. Select Amount From the Expressed As drop-down list.
4. Enter the total limit of the agreement in the Main Limit field.
5. If required, enter possible orders held by other parties in the Placement display list, as amount (or percent).
6. Enter the reinsurer’s share amount in the Share Figures Amount display list.
7. Click OK.

Share Statuses #

For description of share statuses like Offered and Written, refer to the field descriptions under Enter Share Expressed as Percent.

Share Figures % #

For explanation of shares as percent, refer to the field descriptions under Enter Share expressed as Percent. The behaviours are the same however when share is expressed as amount, the system calculates the share percentages from share amounts.
Example:

Share from 100%:Share Amount x 100
Main Limit

Maintain Non-Proportional Facultative Shares #

Risks negotiated individually and where the reinsurer undertakes payment of all losses up to a pre-agreed limit, might in SICS be allocated with shares expressed as either percent or amount.

The below are field descriptions for shares expressed as percent. For shares expressed as amount, see Enter Share Expressed as Amount under the Maintain Proportional Facultative Shares chapter. For description of how to enter shares and of the share statuses, like Offered and Written, refer to Maintain Proportional Facultative Shares.

Maintain Facultative Outward Cedent’s Contract Share #

To ease registration of large numbers of facultative protections, it is sometimes beneficial to group these into a contract - a proportional or non-proportional facultative outward cedent contract. You can express shares on this level either as percent or as amount.

For the rest of the fields, refer to Field Description for Share Expresses as Percent

Maintain Proportional Direct Shares #

Direct polices are normally written in total by one insurer, however larger direct policies are often split between several insurers. In any case SICS, lets you give the share information, either expressed of 100% or of a broker’s order.

Enter Share Expressed as Percent #

To allocate the policy in portions of 100:

1. Open your business and click the Share(S) button on the Navigation bar.
2. If needed, click the Edit button
3. If required, enter Broker’s Order in the Placement display list.
4. Enter the insurer’s share on the Share Figures tab. Typically you will enter the share in the row called From 100%.
5. Click OK.

Enter Share as Part of Broker’s Order #

Express share as part of the intermediary’s share, e.g. enter your share when it has been informed as a percentage of broker’s order.

1. Open your business and click the Share(S) button on the Navigation bar.
2. If needed, click the Edit button
3. In the Placement display list, enter Broker’s Order.
4. On the Share Figures tab, on From Broker’s Order row, enter the insurer’s share (e.g. your share), as it is expressed of the order.
5. Click OK.

SICS calculates automatically Share From 100% based on your input.

Share Statuses #

Offered: The share proposed by an insured to an insurer at offer stage.

Written: The share that the insurer has accepted to participate with, but not necessarily confirmed by the insured.

Estimated Signed: A share that the insurer anticipates will be the confirmed share.

Signed: The final and exact share of the insurer, confirmed by the insured after possible sign-downs.

For further description of shares as they relate to the different life cycle statuses of a business, refer to section Handle Offer/ Quotation Process.

Maintain Non-Proportional Direct Shares #

Direct polices where the insurer undertakes payment of all losses up to a pre-agreed limit, are normally written in total by one insurer. Large policies however are often split between several insurers. In any case, SICS lets you record the share either expressed of 100% or of the order of the broker.

The same principles apply here as for proportional direct business. For more details, refer to Maintain Proportional Direct Shares.

Maintain Proportional Treaty Shares #

For business where the reinsurer and cedent have agreed in advance to share premium and losses proportionally, you may store relevant share information depending on the treaty being quota share, surplus or something else (e.g.open cover).

Enter Share for Quota Share Treaties #

Record the share information of the various participants in treaties where the reinsurer assumes a fixed percentage of losses. Quota share treaties may hold a quite comprehensive set of share conditions, e.g. reinsurer’s share and ceded. Note that the quota share percent itself is NOT a share condition. (The only place where you can record this percent is in a reinsurance or protection program.)

Below are field descriptions for quota share treaties. For descriptions on how to enter them and on share statuses, like Offered and Written, refer to Maintain Proportional Facultative Shares.

Enter Share for Surplus Treaties #

For proportional treaties, where the limit is expressed as multiple of the cedent’s retention, you may enter the share either expressed of 100%, of ceded share or of a broker’s order.

Below are field descriptions for surplus treaties. For more information about how to enter these shares and of share statuses, like Offered and Written, refer to Maintain Proportional Facultative Shares.

Enter Share for Other Proportional Treaties when Expressed as Units #

Treaties with risks too large to be accommodated within normal treaties may be included in treaties placed in units, e.g. 10 out of 80 units (or 10 satellites out of 80). Allocate the shares of your treaty as number of units out of a total.

1. Open your business and click the Share(S) button in the Navigation bar to see the Share Conditions details.
2. Select in the Share group box, “Units” from the drop-down list in Expressed As and enter Total Units.
3. Enter in the Placements display list, number of units placed via Broker.
4. Enter in Share Figures % group box number of Units accepted by your company
5. Click Save.

Note! In SICS, you can express the shares as units for treaties that have type of participation other than surplus (Surplus, Surplus 1, Surplus 2 and Surplus 3) and quota share (Quota Share and US Quota Share). Units are available for, for example for Open Cover.

Maintain Non-Proportional Treaty Shares #

Contracts where the reinsurer has agreed to automatically pay losses exceeding a pre-agreed limit, may be express as percent of 100% or of any order.

Enter Share Expressed as Percent #

Allocate the agreement in portions of 100.

1. Open your business and click the Share Condition (S) button on the Navigation bar.
2. If needed, click the Edit button.
3. If you require, you may enter the Broker’s Order in the Placement display list.
4. Enter the reinsurer’s share in the row called From 100% on the Share Figures tab.
5. Click OK.

Enter Share as Part of Broker’s Order #

Express share as part of the intermediary’s share; e.g. enter your share when it has been informed as a percentage of broker’s order.

1. Open your business and click the Share Condition (S) button on the Navigation bar.
2. If needed, click the Edit button.
3. Enter Broker’s Order in the Placement display list.
4. On the Share Figures tab, in the row called From Broker’s Order, enter the reinsurer’s share (e.g. your share), as it is expressed of the order.
5. Click OK.

SICS automatically calculates Share From 100% based on your entries.

Enter Share as Part of any Order #

Express the share as part of some other party’s order; e.g. enter your share when it has been informed as a percentage of an agent’s order.

1. Open your business and click the Share Conditions (S) button on the Navigation bar.
2. If needed, click the Edit button.
3. In the Placement display list, enter the order (Order or Net of Gross) of which the reinsurer’s share is expressed.
4. On the Share Figures tab, enter the reinsurer’s share (e.g. your share), as it is expressed of the order (Share From Order or Share From Net of Gross).
5. Click OK.

SICS automatically calculates Share From 100%.

Calculate Share from Order(s) #

When the reinsurer has the entire order or net of the treaty, you may enter these and get the reinsurer’s share calculated automatically.

1. Open your business and click the Share Conditions (S) button on the Navigation bar.
2. If needed, click the Edit button.
3. In the Placement display list, enter the order in Net of Gross and/or in Order. The system calculates the Share From 100% automatically from the orders.
4. Click OK

The system calculates the Share From 100% only for the share status that is required for the life cycle status of your business. For example, if your business is definite and signed share is required, the system calculates only the signed share, not the written share. If no share is required (e.g. status is new agreement offered), the system calculates share from 100% for the offered share.

Share Statuses #

For description of share statuses like Offered and Written, refer to the field descriptions in the Maintain Proportional Facultative Shares on page 6-15 section.

Maintain Shares on Sub Levels #

Although it is most common to have only one share per agreement, it might be that it stipulates several shares, e.g. one for fire cover and one for business interruption cover. Within the same agreement, in SICS you can record different shares per:

• Section
• Insured Object Cession
• Declaration

For information on how to override a condition on a sub level in general, refer to Override Inherited Conditions on page 6-3 .

Note! To enter a share on a sub level only, you need to create the business with a pending Life Cycle Status. After you have entered the share information on the relevant sub level(s), you can change the life cycle status to, for example, ‘Definite’. For more information about how to change a status, refer to the Handle Life Cycle Status section.

Maintain Share on Sections #

For a section exactly the same share figures are available as on the agreement/main section level.

Maintain Share on Cessions and Declarations #

For facultative business exactly the same share figures are available on cessions/declaration as on the agreement/section level.

For treaty business however, the shares of a cession or a declaration have special handling. If entering shares items specifically for a cession or declaration, the shares items available will be the same as for a proportional facultative business, with the exceptions that the treaty share will also be available. For details, see the_Field Descriptions - Maintain Share on Cessions and Declarations._

If your cession/declaration is a special acceptance, the shares will be as for a normal overridden cession/declaration, however there are other relevant functions. For more information, refer to Maintain Special Acceptances.

For the rest of the fields, refer to Maintain Proportional Facultative Shareson page 6-15.

Example: Calculate ‘Share from 100%’ on Cession or Declaration