Morley Speed, Managing Director and Mike Rosen, Senior Vice President

The implications of the many possible outcomes of the current “Eurozone Crisis” are profound and unpredictable and in some cases, unprecedented. The implications are also wide-ranging, embracing political, economic and legal dimensions. Such complexity gives rise to different, not to say contradictory, interpretations and predictions. However, we can only be certain that actual events, when they happen, will follow their own unique trajectory.

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The amount of the expected recovery from long-tail XL reinsurance treaties of course will vary in line with the differing provisions of these clauses.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

The amount of the expected recovery from long-tail XL reinsurance treaties of course will vary in line with the differing provisions of these clauses.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

David Lewin, Head of International Casualty
Contact

The Indexation Clause – otherwise referred to as the Stability Clause, Inflation Clause, or Severe Inflation Clause (SIC) – is designed to maintain the real monetary value of the retention and (where applicable) the limit under a long-tail excess of loss (XL) reinsurance treaty over the duration of the claims payout pattern. The clause is only relevant to losses that are of a long-tail nature (i.e., that take a long time to become paid) and is commonly found in the terms and conditions of Motor Liability (MTPL), General Liability (GTPL), and Professional Liability TPL XL reinsurance contracts of European cedants.

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