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Azerbaijan

Established

Glossary - L

Leader (leading underwriter)
if several (re-)insurers participate in a contract, one company assumes the role of leader. The policyholder deals exclusively with this lead company. The lead (re-)insurer normally carries a higher percentage of the risk for own account.

Letter of credit (LOC)
bank guarantee; at the request of the guaranteed party, the bank undertakes to render payment to the said party up to the amount specified in the LOC. This method of providing collateral in reinsurance business is typically found in the USA.

Life and health (re-)insurance
collective term for the lines of business concerned with the insurance of persons, i.e. life, pension, health and personal accident insurance.

LIMIT
The maximum sum that an insurer or reinsurer will pay under a policy or for a given event or occurrence.

Loss, insured
the insured loss reflects the total amount of losses covered by the insurance industry (insurers and reinsurers).

Loss ratio
proportion of loss expenditure in the → retention relative to the (gross or net) premium earned.

MAXIMUM POSSIBLE LOSS
Maximum possible loss which would be incurred if the company�s fire alarm didn�t work and the fire were put out by a fire brigade.