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Key to case study 8. Johnson is the owner of a house. The cost of rebuilding the house will be ¥ 600,000. He has a mortgage for ¥ 350,000 with China Construction Bank. Discuss what extent both Johnson and China Construction Bank have an insurable interest in the house?

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key to case study 8
Key to case study 8
  • Johnson is the owner of a house. The cost of rebuilding the house will be ¥ 600,000. He has a mortgage for ¥ 350,000 with China Construction Bank. Discuss what extent both Johnson and China Construction Bank have an insurable interest in the house?
  • Johnson is the owner of the house and therefore has 100 percent insurable interest of the house, that is, ¥ 600,000.
  • China Construction Bank has also an insurable interest as mortgagee in the house. But the interest is limited to $350,000.
  • In practice, China Construction Bank will require Johnson to insure the house in the joint names of the owner of the house and China Construction Bank.
content
Content
  • 1. London Insurance Market
  • 2. London Insurance companies
  • 3. London Insurance Organizations
  • 4. Insurance intermediaries
  • 5. Recent Changes in London Market
london insurance market
London Insurance Market

A market is a group of people who are individuals and members of organizations. They are the actual or potential buyers of a product.

Some specialists believe that the core of its activity in London is the conduct of “internationally traded insurance and reinsurance business”.

2 london insurance companies
2. London Insurance companies
  • The amount of insurance companies

500

companies with

head offices

127

foreign

companies

3 london insurance organizations
3. London Insurance Organizations

Association of British Insurers

Institute of London Underwriters

London Insurance and Reinsurance

Market Association

Organizations

Fringe companies

Protection and Indemnity Clubs

Contact offices

Pools

Lloyd\'s of London (see the pictures)

3 london insurance organizations1
3. London Insurance Organizations

Association of British Insurers

Institute of London Underwriters

London Insurance and Reinsurance

Market Association

Organizations

Fringe companies

Protection and Indemnity Clubs

Contact offices

Pools

Lloyd\'s of London (see the pictures)

a association of british insurers
A. Association of British Insurers
  • Association of British Insurers (ABI) is the main trade association of insurance companies in the UK , with membership of 450 firms transacting all classes of life and non-life insurance.
  • They account for over 90% of the worldwide business of the company market. ABI has eight regional representatives in various parts of the UK .
b institute of london underwriters ilu
B. Institute of London Underwriters (ILU)
  • Institute of London Underwriters (ILU) is the trade association for companies to write marine, aviation and transport business in the London company market.
  • All companies authorized by the DTI (Department of Trade and Industry) to write such classes are eligible to apply for membership provided they have been transacting such business in the UK or in a comparable market elsewhere in the world.
c london insurance and reinsurance market association
C. London Insurance and Reinsurance Market Association
  • London Insurance and Reinsurance Market Association (LIRMA) is also the trade association for companies to write primarily non-marine insurance and reinsurance business in the London Market.
  • Only companies that are authorized to write insurance in the UK may join as Ordinary members; there are about 104 members. There is considerable overlap between the membership of LIRMA and ILU, therefore there are 39 companies belonging to both bodies.
d fringe companies
D. Fringe companies
  • The term “fringe companies” in the past referred to companies that operated on the fringes of the Lloyd\'s market. They may write direct insurance and reinsurance business on the London market.
  • They are relatively small companies which will take a small line on risks led by a Lloyd\'s syndicate. At the time of writing, there are very few companies in that category, but their number does tend to vary with the state of the underwriting cycle.
  • They enter the market at times when capacity is scare and leave the market when premium rate are falling and losses are rising.
slide12
E. Contact offices

Some foreign companies maintain an offer in London to keep in contact with the market, and to transmit to their head offices for acceptance any business which may be offered to them by brokers. It is an offence for such a company to actually underwrite the business in Britain. F. Protection and Indemnity Clubs

Marine Protection and Indemnity Clubs (P&I Clubs) form the most important group of mutual associations operating on the London Market.

At the end of 1992, of the 41 Clubs writing business in Britain, 4 were incorporated in Bermuda and 2 in Luxembourg. Many of the Clubs employ managers who act for two or more Clubs.

slide13
G. Pools

There are two pools operating in the London Market. One is International Oil Insurers and the British insurance (Atomic Energy) Committee. Both operate on a net line basis.

  • H. Lloyd\'s of London

Lloyd\'s of London is a market place. The capital is supplied by investors, known as Names, who conduct their business through syndicates. Managing agents run these syndicates on the Names\' behalf. (see the chart)

In 1994, 25 corporate investors including 12 listed investment companies formed solely to underwrite business at Lloyd\'s. They were admitted to membership of Lloyd\'s.

4 insurance intermediaries
4. Insurance intermediaries

4.1 Insurance Broker

An insurance broker means an person, based on the interests of the applicant, provides intermediary services between the applicant and the insurer and receives a commission from insurer.

slide16

4.2 Insurance agentAn insurance agent means an entity or an individual delegated by an insurer and to transact insurance business on behalf of the insurance company.

slide18

Overlooking of Lloyd’s outside

Clock locating in the center of the first floor.

slide23

Mansion house

Bank of England

Stock exchange

Royal exchange

Lloyd’s market

ILU

Association of British Insurers

Lombard street

Lloyd’s Register of shipping

Plantation house

London underwriting center

Tower of London

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