Our glossary explains technical terms from the areas finance and reinsurance. We hope it facilitates the understanding of our texts, publications and annual reports. If you have comments or suggestions, please use our feedback form!
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Accumulation loss
sum of several individual losses incurred by various policyholders as a result of the same loss event (e. g. windstorm, earthquake). This may lead to a higher loss for the direct insurer or reinsurer if several affected policyholders are insured by the said company.
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Acquisition cost, deferred (DAC)
cost of an insurance company that arises from the acquisition or the renewal of an insurance contract (e.g. commission for the closing, costs of proposal assessment and underwriting etc.). Capitalisation results in a distribution of the cost over the duration of the contract.
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Agency Business
cf. Specialty insurance: A specialty form of non-life primary insurance that focuses on narrowly defined, homogenous portfolios of niche or other non-standard risks (specialty business), whereby the typical insurer functions (acquisition, underwriting, policy issuing, premium collection, policy administration, claims settlement, etc.) can be outsourced to specialized managing general agents (MGAs) or third-party administrators (TPAs).
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Aggregate excess of loss treaty
a form of excess of loss treaty reinsurance under which the reinsurer responds when a ceding insurer incurs losses on a particular line of business during a specific period (usually 12 months) in excess of a stated amount.
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Agricultural insurance
cultural insurance covers provide protection for farmers, forestry operators and the fishing industry - especially in developing countries - against the consequences of natural disasters such as crop failures due to hail, windstorm, frost, flood damage or disease.
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Alternative risk financing
use of the capacity available on the capital markets to cover insurance risks, e. g. through the securitisation of natural catastrophe risks.
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American Depositary Receipt (ADR)
share certificates written by US banks on foreign shares deposited there. Instead of trading the foreign shares directly, US stock exchanges trade the ADRs.
