4.4 Legal risk - Scor

product is one where ultimate losses are known comparatively quickly; ultimate losses under a “long-tail” product are
sometimes not known for many years.
TECHNICAL RESULT
The balance of income and expenses allocated to the insurance business and shown in the technical statement of
income.
TWIN-ENGINE BUSINESS
The combination of SGPC and SGL underwriting capabilities
U
UNDERWRITING
Decision by an insurer or a reinsurer to accept to cover a risk upon collection of a premium.
UNDERWRITING CAPACITY
The maximum amount that an insurance or reinsurance company can underwrite. The limit is generally determined by
the company’s retained earnings and investment capital. Reinsurance serves to increase a company’s underwriting
capacity by reducing its exposure to particular risks.
UNDERWRITING CYCLE
Pattern in which Property and Casualty insurance and reinsurance premiums, profits and availability of coverage rise
and fall over time.
UNDERWRITING EXPENSES
The aggregate of policy acquisition costs, including commissions, and that portion of administrative, general and other
expenses attributable to underwriting activities.
UNDERWRITING RESERVES
Amounts that an insurer or reinsurer must place in reserves in order to pay out on claims insured, and on liabilities
arising from policies written.
UNDERWRITING YEAR
The year commencing with the effective date of a policy or with the renewal date of that policy, to be distinguished from
the Accounting year. For example, a claim may occur during the current accounting year, but which relates to a policy
commencing in a prior underwriting year.
UNEARNED PREMIUM RESERVES
For each reinsurance contract, these cover the portion of premiums written during the year relating to the period
between the balance sheet closing date and the date at which the reinsurance contract expires.
UNIT-LINKED CONTRACT
Life insurance contract or capitalization certificate for which the amount guaranteed and bonus amounts are expressed,
not in a specific Euro amount, but by reference to one or more units of account such as mutual fund units or real estate
investment trust units. Contractual guarantees are directly linked to upward or downward variations in a security listed
on a regulated market or in the value of a real estate asset.
X
XXX (OR TRIPLE X)
A regulation in the U.S., commonly referred to as Regulation XXX (or Triple X) which requires a relatively high level of
regulatory, or statutory, reserves that U.S. life insurance and life reinsurance companies must hold on their statutory
financial statements for various types of life insurance business, primarily certain level term life products. The reserve
levels required under Regulation XXX increase over time and are normally in excess of reserves required under IFRS.
V
VALUE OF BUSINESS ACQUIRED (VOBA)
This refers to life reinsurance portfolios acquired in a business combination. It is calculated as the present value of the
stream of expected future cash flows including estimates of the future technical results, the future investment income
less future administration expenses. The present value calculation is based on assumptions and risk discount factors
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