Glossary of Terms

Active Underwriter

The lead underwriter at a Lloyd's syndicate who is authorised to accept risks on behalf of the syndicate's members. They are responsible for the day-to-day underwriting decisions and are accountable to Lloyd's for the syndicate's performance.

Adjustment Premium

An additional or return premium calculated after the policy period ends, based on actual figures (such as turnover or payroll) that were estimated at inception. Common in policies where the final exposure can only be confirmed retrospectively.

BAA (Binding Authority Agreement)

A contract between a Lloyd's syndicate (or company market insurer) and a coverholder that grants the coverholder authority to bind insurance contracts on the insurer's behalf, within defined limits. The BAA sets out the classes of business, geographic scope, and maximum line size the coverholder may write.

Binding Authority

The delegated authority arrangement under which a coverholder can accept risks and issue policies without referring each one back to the underwriter. Also used informally to refer to the BAA document itself.

Bordereaux

Periodic reports (typically monthly) submitted by a coverholder to the managing agent, listing all risks bound or claims notified under a binding authority. There are two main types: premium bordereaux (listing policies written) and claims bordereaux (listing claims activity).

Box

The physical or virtual underwriting position in the Lloyd's Room where a syndicate's underwriters sit and receive brokers. Brokers visit the box to present risks and negotiate terms.

Broker

An intermediary who acts on behalf of the insured to place risks in the market. At Lloyd's, only Lloyd's-accredited brokers may place business directly with syndicates. The broker is responsible for presenting the risk, negotiating terms, and collecting and distributing premiums.

Bulking Line Slip

A type of lineslip that allows multiple individual risks to be grouped together and processed as a single transaction for signing and settlement purposes. It simplifies administration when a large number of similar, small risks are written under the same terms.

Central Fund

A Lloyd's-maintained fund of last resort that can be called upon to meet policyholder claims if a syndicate's own assets are insufficient. All syndicates contribute to it annually. Its existence underpins the Lloyd's security promise to policyholders.

Claims Lead Arrangements (CLA)

A formal agreement that designates one syndicate (the claims leader) to manage and agree claims settlements on behalf of all co-insurers on a risk. The other syndicates agree in advance to follow the claims leader's decisions, reducing duplication and speeding up settlement.

CLASS

The Claims and Loss Advice and Settlement System. The legacy Lloyd's central system used to process and settle claims between brokers and syndicates. It has been progressively replaced by ECF and the Velonetic platform.

Contract Certainty

The Lloyd's and London market requirement that all policy terms and conditions are agreed and documented before or at the time cover incepts. It prevents the historic practice of policies being placed on a "slip" with full documentation following weeks or months later.

Coverholder

A company or individual outside Lloyd's that has been granted a binding authority by a managing agent, allowing them to enter into contracts of insurance on behalf of Lloyd's syndicates. Coverholders must be approved by Lloyd's and are subject to regular audits.

Crystal+

The Lloyd's market data and reporting platform that provides syndicates and managing agents with access to market-wide statistics, performance data, and regulatory returns. It replaced the earlier Crystal system.

DCOM

The Document and Contract Management platform used in the Lloyd's market for electronic placement and endorsement of risks. It allows brokers and underwriters to exchange, agree, and store contract documents digitally, supporting contract certainty requirements.

DDM

Delegated Data Manager. The Lloyd's system used by coverholders and managing agents to submit, validate, and process bordereaux data. It standardises the format of delegated authority reporting across the market.

Declarations

Individual risk certificates or schedules issued under a lineslip or binding authority. Each declaration confirms the specific terms, insured, and premium for a single risk bound under the master facility.

Deductible

The amount the insured must pay towards a claim before the insurer's liability begins. Also called an excess in some markets. A higher deductible typically results in a lower premium.

Delegated Authority

The arrangement by which a managing agent grants a third party (a coverholder or TPA) the authority to bind risks or handle claims on its behalf. Delegated authority business is governed by a formal agreement (BAA or claims agreement) and is subject to Lloyd's oversight requirements.

ECF (Electronic Claims File)

The Lloyd's market system for managing and settling claims electronically. ECF replaced paper-based claims processing and allows brokers, managing agents, and Lloyd's to view, agree, and settle claims through a shared digital workflow.

Endorsement

A formal amendment to an existing policy that changes one or more of its terms, conditions, or coverage details. Endorsements may add, remove, or alter coverage and are attached to the original policy document. Also called a mid-term adjustment (MTA).

Excess

The first portion of a claim that the insured bears themselves. The insurer only pays the amount above the excess. In reinsurance, the term refers to the retention the cedant keeps before the reinsurance attaches.

Expiry

The date on which a policy's coverage ends. After expiry, no new losses are covered unless the policy is renewed. In C2MS, the expiry date is a required field and must be after the inception date.

FCA

The Financial Conduct Authority. The UK regulator responsible for overseeing the conduct of financial services firms, including Lloyd's brokers and managing agents. The FCA focuses on consumer protection, market integrity, and competition.

Firm Order

The instruction from the insured (via their broker) to the market to bind coverage at the quoted terms. Once a firm order is given, the risk moves from quote to written status. It confirms the insured's acceptance of the terms offered.

FNOL (First Notice of Loss)

The initial notification to an insurer that a loss event has occurred. FNOL triggers the claims handling process and starts the clock on any response time obligations. It does not need to include full details — those are gathered during the subsequent investigation.

GWP (Gross Written Premium)

The total premium income written by a syndicate or insurer before deducting reinsurance costs or commissions. GWP is a key measure of an underwriter's book size and is used in performance reporting and regulatory returns.

IBNR (Incurred But Not Reported)

A reserve set aside for losses that have already occurred but have not yet been reported to the insurer. IBNR is an actuarial estimate and is a critical component of a syndicate's total claims reserves.

Inception Date

The date on which a policy's coverage begins. Losses occurring before the inception date are not covered. In C2MS, the inception date is a required field on every section.

Instalment Premium

A premium payment arrangement where the total annual premium is split into scheduled payments (monthly, quarterly, etc.) rather than paid in a single lump sum at inception. Each instalment is a separate financial transaction.

Layer

A defined band of coverage within a reinsurance programme, expressed as an amount in excess of a lower limit. For example, a "$10m xs $5m" layer covers losses between $5m and $15m. Multiple layers stack vertically to provide total programme capacity.

Lead Underwriter

The first underwriter to agree terms on a risk in the subscription market. The lead sets the price and conditions that other following underwriters are invited to match. The lead also typically manages claims and endorsements on behalf of the market.

Lineslip

A facility agreement between a broker and a panel of underwriters that allows multiple risks of a defined type to be bound quickly under pre-agreed terms. Individual risks are declared against the lineslip rather than being individually negotiated each time.

Lloyd's Brussels

The Lloyd's Insurance Company S.A., established in Belgium to allow Lloyd's to continue writing European Economic Area risks following Brexit. EEA risks that previously attached to Lloyd's of London now attach to Lloyd's Brussels, which then reinsures 100% back to the relevant syndicates.

Lloyd's Platform

The collective term for the electronic systems used to place and process business at Lloyd's, including PPL and DCOM. In C2MS, the Lloyd's Platform field records which platform was used for a given section.

LMA

The Lloyd's Market Association. The trade body representing managing agents at Lloyd's. The LMA produces standard market wordings, guidance, and model clauses, and represents managing agents in discussions with Lloyd's, regulators, and other market bodies.

Managing Agent

A company authorised by Lloyd's to manage one or more syndicates on behalf of the syndicate's members (Names). The managing agent employs the underwriters, operations, and support staff, and is responsible for the syndicate's compliance with Lloyd's requirements.

MRC (Market Reform Contract)

The standard contract document format used in the London market to record the terms of an insurance or reinsurance placement. The MRC replaced the traditional slip and is structured to support contract certainty, with clearly defined sections for risk details, conditions, and signing information.

MTA (Mid-Term Adjustment)

A change made to a policy during its coverage period, such as adding an insured location, increasing a limit, or correcting an error. MTAs generate an endorsement and may result in an additional or return premium.

Names

The individual or corporate members of Lloyd's who provide the capital that backs syndicate underwriting. Historically, Names were private individuals with unlimited liability; today most capacity is provided by corporate members. Names share in the profits and losses of the syndicates they support.

NTU (Not Taken Up)

A status applied to a quoted risk that the insured decided not to proceed with. An NTU means no policy was bound and no premium is due. It is important to record NTUs accurately as they affect renewal tracking and market statistics.

Open Market

Business placed directly in the Lloyd's market by a broker, where each risk is individually negotiated with underwriters rather than being bound under a delegated authority. Open market placements are the traditional Lloyd's model and typically involve larger or more complex risks.

Order (signed/written)

The total percentage of a risk that the insured has asked the market to cover (the order). The written line is the share an individual underwriter agrees to take. The signed line is the final allocated share after signing down, once the total written lines are scaled to match the order.

PBO (Principles-Based Oversight)

Lloyd's regulatory framework that sets high-level principles and outcomes for managing agents rather than prescribing detailed rules. Under PBO, managing agents have more flexibility in how they meet Lloyd's requirements, but are held accountable for the results.

Placing

The process of presenting a risk to underwriters and obtaining their agreement to provide coverage. Placing involves the broker presenting the risk details, negotiating terms, and collecting written lines from one or more underwriters until the required order is filled.

PPL

Placing Platform Limited. The Lloyd's market's primary electronic placing platform, which allows brokers and underwriters to negotiate and agree risks digitally. PPL supports the full placing workflow from submission through to firm order and contract certainty.

PRA

The Prudential Regulation Authority. The UK regulator responsible for the financial safety and soundness of insurers, including Lloyd's and its managing agents. The PRA sets capital requirements and oversees risk management standards.

Premium Trust Fund

A ring-fenced fund held by each managing agent into which all premiums received are paid. The fund is held on trust for policyholders and can only be used to pay claims, expenses, and reinsurance premiums. It is a core element of Lloyd's policyholder protection.

Quote

An offer from an underwriter to provide coverage at specified terms and premium. A quote is not binding until the insured gives a firm order. In C2MS, Quote is a section status that indicates terms have been offered but the risk has not yet been bound.

Renewal

The process of continuing an existing policy for a further period, typically on revised terms and premium. A renewal is treated as a new contract and requires fresh agreement from both parties. In C2MS, renewals are linked to the prior-year section via the Renewed From Reference field.

Reserve

An amount set aside by an insurer to meet future claims payments. Reserves include case reserves (for known, reported claims) and IBNR reserves (for losses not yet reported). Adequate reserving is a key regulatory and financial requirement.

Reinsurance to Close (RITC)

The mechanism by which a Lloyd's year of account is closed, typically after three years. The open year's outstanding liabilities are reinsured into the next open year of the same (or another) syndicate, in exchange for a premium. RITC allows members to crystallise their profit or loss and exit the syndicate.

Risk Code

A standardised code used to classify the type of risk being insured, for reporting and regulatory purposes. Lloyd's uses its own risk code taxonomy, and each section in C2MS must be assigned at least one risk code.

Room (The)

The underwriting floor at Lloyd's of London where brokers and underwriters meet to transact business. Physically located in the Lloyd's building in the City of London, the Room is the symbolic heart of the Lloyd's market, though much business is now conducted electronically.

SBF (Syndicate Business Forecast)

The annual business plan submitted by each managing agent to Lloyd's, setting out the syndicate's planned premium income, risk appetite, and capital requirements for the coming year of account. Lloyd's reviews and approves SBFs as part of its oversight of the market.

Section

In C2MS, a section represents a single line of coverage within a policy. A policy may have multiple sections covering different classes of business or coverage layers. Each section has its own status, premium, written line, and risk classification.

Signed Line

The final allocated share of a risk that an underwriter receives after signing down. If total written lines exceed 100% of the order, each underwriter's written line is scaled down proportionally to produce the signed line. The signed line is the basis for premium calculation and claims settlement.

Signing

The process by which the Lloyd's Policy Signing Office (LPSO) or its successor confirms and records the final allocation of lines among co-insurers on a risk. Signing converts written lines into signed lines and triggers premium settlement.

Signing Down

The proportional reduction applied to each underwriter's written line when the total written lines exceed the order. For example, if underwriters have written 120% of a 100% order, each line is multiplied by 100/120 to produce the signed line.

Slip

The document presented by a broker to underwriters when placing a risk. The slip summarises the key risk details and terms. Underwriters indicate their participation by initialling the slip and noting their written line. The MRC is the modern, standardised form of the slip.

SM&CR

The Senior Managers and Certification Regime. A UK regulatory framework that holds senior individuals at financial services firms personally accountable for their areas of responsibility. At Lloyd's, managing agents must map their senior roles to SM&CR functions and maintain fitness and propriety records.

SN&D

Signing and Noting and Debit. The Lloyd's process for recording and settling premium transactions between brokers and syndicates. SN&D transactions are processed through the Lloyd's central accounting system and result in net cash movements between parties.

Subscription Market

A market structure where multiple insurers each take a share of a single risk, rather than one insurer covering it entirely. Lloyd's is the world's most prominent subscription market. Each participant's share is their written (and ultimately signed) line.

Syndicate

A group of Lloyd's members (Names) who pool their capital to underwrite insurance risks for a given year of account. Each syndicate is managed by a managing agent and is identified by a number (e.g. Syndicate 2001). A managing agent may run multiple syndicates.

TPA (Third Party Administrator)

An external company appointed by a managing agent or coverholder to handle claims on their behalf. TPAs are common in delegated authority arrangements where the coverholder does not have in-house claims expertise. They must be approved and are subject to oversight requirements.

Triage

The initial assessment of a new claim to determine its complexity, coverage position, and the appropriate handling route. Triage decides whether a claim is straightforward (fast-track) or requires detailed investigation, and assigns it to the right team or handler.

UMR (Unique Market Reference)

A unique identifier assigned to each risk placed in the London market. The UMR is generated by the broker and is used across all systems (PPL, ECF, C2MS) to link related transactions — placements, endorsements, and claims — to the same underlying risk.

Underwriter

A person authorised to accept insurance risks on behalf of a syndicate or insurer. Underwriters assess the risk presented by brokers, decide whether to participate, and set the terms and premium. At Lloyd's, the active underwriter is the most senior underwriter on a syndicate.

Velonetic

The market services company created to operate the Lloyd's and London market's shared technology infrastructure, including the claims and settlement platforms. Velonetic took over the operation of ECF and related systems from Lloyd's, with the aim of modernising and consolidating market technology.

Written Line

The share of a risk that an underwriter agrees to take at the time of placing, expressed as a percentage of the total risk or of the order. Written lines may be scaled down during signing if the total exceeds the order, producing the signed line.

Year of Account (YOA)

The year in which a risk incepted, used as the basis for Lloyd's accounting. Each syndicate runs separate accounts for each year of account. A year of account typically remains open for three years before being closed via RITC, at which point the final profit or loss is determined for the members of that year.