The document discusses the need to establish an organized insurance market in Iran given the large risks in the current insurance market conditions. It notes that the current reliance on a few insurance companies to accept and distribute risks means risks are mainly managed through central insurance companies. It also discusses reviewing organized markets in other countries, both traditional insurance exchanges and modern fintech and reinsurance platforms, as well as the purposes and features of the historic New York Insurance Exchange.
4. Traditional organized markets
Hamburg Insurance Exchange (1558)
Rotterdam Insurance Exchange (1598)
Amsterdam Insurance Exchange (1611)
LLOYDS OF LONDON (1686)
TEXAS INSURANCE EXCHANGE
THE INSURANCE EXCHANGE OF AMERICA FLORIDA
Illinois Insurance Exchange (INEX)
New York Insurance Exchange (1980-1987)
Dutch Insurance Exchange Association (1986)
Shanghai Insurance Exchange (2016)
EBIX Australia
Canadian Petroleum Insurance Exchange Ltd. (CPIXL)
5. Modern marketplaces
SwiftRe® – who runs SwiftRe (link), a placement portal for fac risks
Tremor Technologies
Eazyre.com
Gen Re
Sandton Re
https://www.relayplatform.com/
Solutions | eReinsure
B3i
6. Modern marketplaces
Aon’s ABConnect Platform
Whitespace– a well-known player in the London Market and Lloyd’s
AkinovA (Link) – an “electronic marketplace for the transfer and
trading of insurance risk”
PlaceRe: Online Reinsurance Marketplace
RiskBook approved by Lloyd’s
X-gRm
CATEX (1994) web-based insurance and reinsurance systems in the
world. CATEX is a member of ACORD and works closely with the
industry to improve data quality and information exchange for the risk
industry. CATEX is a Microsoft Certified Partner.
7. Swiss re
A better control over the whole underwriting process;
• A solution for the creation and renewal of treaty business, enabling
cedents to develop programs for reinsurance and to manage the
collaboration requirements for ceding the risk to the market;
• An increased transparency;
• An enhanced potential for the optimization of the portfolio;
• An increased speed of the placement;
• An encouragement for placing alternative solutions;
• Helps cedents more effectively manage the value chain
8. New York Insurance Exchange
1980-1987
The Constitution was finalized in 1979.
a self-governing, centralized insurance marketplace.
Initially, it acted essentially as a reinsurance marketplace.
intended to be a Lloyd’s-type centralized market for the brokering and
underwriting of insurance risks and to facilitate the underwriting of
reinsurance.
9. The purposes of the exchange
(1) to provide a facility for the underwriting of:
(A) reinsurance of all kinds of insurance;
(B) direct insurance of all kinds on risks located entirely
outside the United States;
(C) direct insurance of all kinds on risks located in the United
States other than in this state
(D) risks which shall have been submitted to and certified as
having been rejected by a committee representative of insurers
licensed by the superintendent under article sixty-three of this
chapter, subject to conditions imposed by the superintendent
pursuant to regulation;
(2) to manage the facility authorized by this article, in accordance
with regulations promulgated by the superintendent.
10. The purposes of the exchange
Member brokers could submit business to underwriting members
(known as syndicates).
Only member brokers could submit business through the exchange, and
syndicates were allowed to conduct insurance business only on the
exchange.
On opening date, there were 16 separate syndicates, and eventually 50
syndicates wrote business on the Exchange before it closed in 1987.
Syndicates are not traditional insurers, but rather are persons or
entities that essentially buy risk. All business was processed through the
Exchange facilities, and there was a centralized trading floor.
11. Exchange several features
First, all business was to be conducted at the exchange, on the centralized trading
floor.
Second, while several syndicates could back the same risk, each was only liable for its
own percentage of participation (several liability).
Third, it was a brokers’ market – only member brokers could place business on the
Exchange.
Fourth, all transactions were processed by the Exchange, ostensibly given it oversight
and control over the health of the marketplace.
Fifth, unlike traditional insurance companies, the Exchange was self-regulating. It
operated according to its Constitution, and set rules for its members.
Sixth, the Exchange maintained its own security fund. The security fund was a
separate entity from the Exchange, with its own charter, by-laws and
directors. Syndicates were required to contribute to the security fund. The security
fund was obligated to pay the contractual obligations of liquidated syndicates.
12. Exchange several features
Initially, the Exchange was successful.
According to various reports, by 1984, there were thirty-five active
syndicates on the Exchange, and more than one hundred active
brokers.
According to Bickford’s 1986 article, the question of whether an
insurance exchange market would work in the U.S. had “been resolved
by the remarkable success of the New York Insurance Exchange in its
five year existence.”[3]
Indeed, by 1986, the Exchange was writing $1.2 billion in premiums.
13. Exchange several features
The Exchange’s position in the insurance market began to be
undermined as the tight market that demanded its creation in the
1970’s loosened in the early 1980’s and had disappeared by later that
decade.
Some reports indicate that the Exchange began to be viewed as a
market for undesirable risks, uninsurable anywhere else.
Many syndicates began to write business over their guideline capacity
and were under-capitalized for the risks they had written.
The centralized market that ostensibly was overseeing the market and
ensuring its health was overburdened an back-logged by the sheer
volume of business. By 1985, the Exchange’s business had begun to
decline.
14. re-opening 2010
Recently, there is substantial interest in re-opening the New York
Insurance Exchange.
As the 300-plus years of the London market has shown, independent
insurance markets are necessary, and can be both profitable and self-
sustaining.
Notably, Article 62, creating the Exchange and authorizing its
operations, is still on the books.
15. Hamburg Insurance Exchange
(1558)
The Hamburg Insurance Exchange is the only one of its kind in Germany, which just
goes to highlight Hamburg’s special position as a centre of trade and insurance.
England is the only other European country with an insurance exchange – Lloyd’s of
London – albeit of a completely different structure and scale.
Unlike the Stock or Commodities Exchanges, the Hamburg Insurance Exchange does
not trade in assets but serves as a platform for insurance companies and brokers to
share information and to initiate and execute business transactions primarily in the
field of transportation insurance but also in industrial fire and liability insurance. The
insurance agents, brokers, underwriting agents and experts admitted to the
Exchange also use the weekly Exchange meetings as a opportunity to deal with
matter rising from current contracts in order and to sign and exchange documents.
The history of the Insurance Exchange dates back to the foundation of the Hamburg
Exchange in 1558. From the very beginning goods transportation insurance was a
core part of activities at the Exchange, alongside goods trading. Still today, business
at the Hamburg Insurance Exchange is largely governed by centuries’ old traditions,
with the spoken word and business handshake taking high precedence on this
platform for face-to-face meetings between business partners.
16. Hamburg Insurance Exchange
By partnering with an underwriting agent, non-local
insurance companies can also participate in the business of
the Hamburg Insurance Exchange. General average
adjusters are experts in ship and cargo damage claims, and
are particularly sought after to assist with processing
insurance claims in the aftermath of a disaster.
All in all, the Hamburg Insurance Exchange admits 134
companies with a total of 433 individuals: 137 insurance
company employees, 192 brokers, 94 underwriting agents
and 10 general average adjusters.
17. Hamburg Insurance Exchange
Exchange meetings take place every Thursday from 13:30 to
14:00 on the trading floor of the Hamburg Chamber of
Commerce in the arcade area between the Exchange Hall
and the Securities Trading Hall.
Almost all admitted companies have a fixed presence at the
Exchange.
The fact that this is often indicated on their company
letterhead in addition to their postal address is testament to
the prestige of the Insurance Exchange within the industry.
28. Shanghai Insurance Exchange
(2016)
set up by 91 shareholders
registered in Shanghai Pilot Free Trade
Zone,
with initial registered capital of RMB
2.235 billion.
four major business lines, namely
1) Insurance,
2) Reinsurance,
3) Insurance Assets
4) Insurance Derivatives,
29. Shanghai Insurance Exchange
Integrated Service System Of Account Management,
Payment And Settlement,
Information Disclosure,
Market Advisory,
Operating System,
Data Management, Etc.
31. GOOD PRACTICE GUIDANCE
FOR DELEGATED AUTHORITIES
Delegated Authority
Delegated authority refers to an arrangement under which an insurer
delegates its authority to a company or partnership to enter into contracts
of insurance on behalf of the insurer.
Cover holder
a company or partnership authorised by an insurer to enter into a contract
or contracts of insurance to be underwritten by the insurer, managed by it
in accordance with the terms of a binding authority.
Line slips
an agreement where an insurer delegates its authority to enter into
contracts of insurance to be underwritten by the insurer to another
insurer.
32. GOOD PRACTICE GUIDANCE
FOR DELEGATED AUTHORITIES
Bulking Line Slips
Non-bulking Line Slips
Consortium Arrangements
Electronic Trading And/Or Internet Selling
Delegated Authority Standards
33.
34. Xchanging
Xchanging is a leader in the provision of integrated customer solutions
for business processing, technology and procurement services for
customers within an array of industries, core among which is the global
insurance industry.
manage complex global and local insurance processes, and transform
businesses through our innovative insurance-specific domain
knowledge, powered by world leading technology platforms.
Xchanging is the largest processor of ACORD messages in the world and
the operator of the infrastructure that supports the London and
international insurance market.
35. Xchanging
Between 2001 and 2013, Xchanging Insurance Services:
processed more than 1.28 million premium transactions between
brokers and risk carriers in the property and casualty sector for the
London insurance market.
managed over 900,000 claims transactions.
stored over 38 million insurance documents in our secure central
market repository.
handled in excess of £54.4 billion in accounting transactions.
36. Xchanging Global Reinsurance
Platform = X-gRm (2015)
X-gRm (previously known as globalREmarket). The multi-broker
platform was developed with feedback from a number of reinsurance
carriers, and the first subscribing broker partner, TigerRisk Partners.
X-gRm delivers a simple, secure and auditable environment for
worldwide reinsurance transactions. The platform provides a single
online repository for brokers to distribute submissions and risk
information quickly, in a consistent format to worldwide reinsurance
carriers.
ability to triage submissions by using the analytics provided by the
brokers, resulting in reduced response times for the reinsurance
transactions.
37. Xchanging’s globalREmarket
Platform
over 600 users from 130 reinsurance carriers have signed up
has been used to exchange 25,000 messages.
offer a live marketplace for indexed products such as Industry Loss
Warranties.
Live RSS and Twitter feeds have been integrated into the dashboard,
providing constant updates from numerous leading market sources
including AIR and RMS,
providing users with a centralised resource for relevant market data
and information.