Gross Markets

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See the NOVUS Walkthrough Guide for general information about the system.


GROSS MARKETS

Gross markets are configured by setting the gross/net flag on the market in the MART program to ‘G’.

1. BROKER application:

The distribution amount to the market subscribers is the gross (premium) amount. This is the amount entered in the TRANPT program.

Typical market:


Account Subscription Comm_out Comm_in Multiplying factor
CLIENT * 100% 5% 0.95
INS . 100% 25% -0.75
S/AGENT - 8% -0.08

The net income to the broker is 25-5-8 = 12% which is the sum of the multiplying factors 0.95 – 0.75 – 0.08 = -0.12. A gross premium of 100 will produce 12 net brokerage on premium-type transactions. For claims type transactions the subscription is used for the calculation - the insurer pays 100% of the claim and the client receives 100% of the claim.

Note that the net brokerage is the net amount after parties have paid/taken their subscription and held/returned their commissions. This is why there is no actual brokerage (XBK) entry in the Market.

Order percent: This is accommodated by signing the market down to the order percent. A 60% order market will have 60% subscriptions for the clients and insurers above.

Notes:

  • NOVUS supports multiple clients, multiple insurers, and multiple silent agents.
  • For reinsurance read ‘re-insurer’ for ‘insurer’ and ‘cedant’ for ‘client’

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2. (RE-)INSURER application:

The distribution amount to the market subscribers is the gross (premium) amount. This is the amount entered in the TRANPT program.

Typical market:

Account Subscription Comm_out Comm_in Multiplying factor
CLIENT * 100% 5% 0.95
Ret/Account : 100% 5% -0.95

The net income to the insurer -95% of the gross premium. A gross premium of 100 will produce 95 premium on premium-type transactions. (For claims type transactions the subscription is used for the calculation - the insurer pays 100% of the claim and the client receives 100% of the claim.)

Notes:

  • Note that the ‘brokerage’ the retained account pays to the (theoretical) XBK account is then passed back to the client. i.e. the ‘brokerage’ on the retained account must balance the client discount.
  • Note the ‘:’ suffix for the retained account the code for which must be the same as the name of your dataset.
  • For facultative reinsurance the market will also include other ‘.’ lines for reinsurers which will carry their appropriate subscriptions.
  • For co-insurance the co-insurer must be given a ‘^’ suffix which will carry its appropriate subscription..
  • For reinsurance read ‘re-insurer’ for ‘insurer’ and ‘cedant’ for ‘client’

Version History

v4.2.0 – Updated to latest version