A contingent policy is a conventional policy which provides insurance protection on a conventional basis with added benefits of allowing the insured client to participate in sharing of underwriting profits and implementation of sound risk management policies. They provide the primary layers of an insurance programme or cover risks not insurable. Contingent policies can be issued as a stand-alone policy or as a part of a risk arrangement where reinsurance is structured above the layers provided by contingency policy. At renewal or cancelation of policy, a performance bonus in declared based on claims experience. With the intention of creating insurance capacity over many years, contingency policies enable the clients to negotiate better insurance rates in the market.


Key benefits


  • A valuable tailored tool for risk management and controlling the client’s risks, losses and exposures.
  • Facilitates sharing of underwriting profits.
  • A flexible arrangement that facilitates various combinations of structures, premiums, cover, insurance and reinsurance capacity.
  • Reduces exposures of price volatilities in the conventional insurance market.
  • Creates insurance capacity and reserves to absorb risk retention for difficult to insure and expensive risks in the conventional market.
  • Cost of risk is stabilized over time and determined with precise certainty.
  • Actuarial input is used to determine suitable limits and reinsurance levels.