Policy placement

When allocating premium to the relevant territories, the underwriter, with input from the broker, should apportion premium as appropriate to the particular contract.

Premiums can be split by geography, risk, coverage, policyholders, or any other method, however, it’s important to keep proper documentation and records to support premium splits. Insurers and brokers should maintain clear and accurate records detailing the methodology used for premium splits and any supporting calculations.

• Buildings and/or contents - Value of local property divided by value of total property
• Directors & Officers – Number of local Directors divided by total Directors
• Employee Liability – Number of local employees divided by total employees

The allocation of premium should be undertaken to reflect the proper allocation of cover. However, it is recognised that this is not an exact science and some judgement may be required. 

There are some territories for which separate Lloyd's Premium Advice Notes (LPANs) are required. Detailed information can be found in the LPAN requirements for direct and reinsurance contracts.

The Lloyd’s international speciality market is exposed to sanctions risk (financial and trade sanctions) and market participants must navigate the myriad of applicable, and at times conflicting, sanctions regulation. 

Where insured assets are movable, and multinational programmes provide coverage in multiple countries, market participants must consider how applicable sanctions – UN, UK, EU, US etc. – may impact a single policy. 

Additional challenges can materialise through delegation and outsourcing, and even through counter parties such as banks and core service providers that may be subject to a different set of regulations.

It is essential for the market to adopt a risk-based approach to mitigate sanctions risk. Lloyd’s Crystal provides an indication of sanctions that apply to countries that have sanctions and we have provided further content in the secure areas.