types of insurance underwriters & integrated policies

8/6/2019 Types of Insurance underwriters & integrated policies

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CLASSIFICATION OF

INSURANCE UNDERWRITERS

There are four main categories of insurance

underwriters in the international insurance

market as regards project finance

1. Multilateral insurance underwriters

2. Commercial issuance underwriters

3. Group captive insurance underwriters

4. Monoline insurance underwriters


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MULTILATERAL INSURANCE

UNDERWRITERS

Financial insurance companies controlled by multilateral

development banks

Most famous is Multi Insurance Guarantee Agency( MIGA )

A part of the World Bank group and operates on a

nonprofit basis to provide insurance for project finance

ventures

STRENGTHS WEAKNESSESProvide Coverage not

available in the market

Especially, as regards

countries with low income

levels

Takes a long time to

obtain approval

Up-Front fee requested

tend to be rather high


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COMMERCIAL INSURANCE

UNDERWRITERS

The largest group and includes the numerous companies offering acomplete range of conventional insurance services

In the field of structured finance the main underwriters are Lloyds ofLondon and AIG

LloydsLloyds

Lloyds is the best-known company in the structured finance segment

Fast and more-flexible procedure in the International market

AIGAIG

Complete range of insurance products

Specializes in the political risk insurance field

Can also provide equity for projects either directly or through its own orthird part managed closed funds


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GROUP CAPTIVE INSURANCE

UNDEERWRITERS

These insurers operate only with companies that

make subscription club payments to obtain their

insurance services.

The amount of coverage available is based on the

level of contribution to d subscription club that

each member is willing to make.


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MONOLINE INSURANCE

UNDERWRITERS

They are global financial insurance company and

their only line of business is financial insurance

(hence the term MONOLINE).

These are specialised underwriters with S&P ,

Moodys and Fitch offering adequate support

for project finance deals

Issues parties unconditional and irrevocable

guarantees to pay capital and interest for debts

at maturity.


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POLICIES INCLUDED IN STANDARD

INTEGRATED INSURANCE PACKAGES

Contractors all risks: This is the main insurancecomponent during the construction period

Financial risks: This component refers to bonding as

regards performance, bid/payment,maintenance/retention, and other business guarantees

Advance loss of profits: In its basic form it guaranteesdebt service during the construction phase of the project

Proffesional Indemnity: Concerns legal and contractualliabilities arisising from proffesional activities required bythe project

Public and product liability: coverage for liabilities arisingfrom damage to third party goods or property or damageto persons as well as third party financial losses


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OBJECTIVES OF

INTEGRATED POLICIES

The objectives of integrated coverage are as follows:

To create a package that can cover all aspects of risk mitigation and offer

profiles not provided by other products.

To arrange bonding facilities.

To generate a constant risk profile for the lender throughout the life of

the project.

To satisfy all insurance requirements by automatically activating event-

dependent components.

To allow the policy holder to assign and transfer coverage without

interrupting or diminishing risk coverage toward the lender.


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CONT

To provide coverage guaranteed by a lead underwriter.

To guarantee maximum coverage and competitive

premiums and to simplify the wording of policies.

To offer high added-value benefits, including loss

control, free appraisal services, specialized legalservices, consulting on guarantee, and complaints.

To provide flexible, adaptable coverage.


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THANK YOU

All the best

types of insurance underwriters & integrated policies

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