What is a Syndicate?
A syndicate is an organized group of businesses, individuals, or different entities. A syndicate is formed by the entities in it to complete a specific project or task. Typically, this project or task is too large for one entity to complete on their own or poses too big a risk for a single entity to take on. An insurance syndicate is a group of insurance businesses and individuals that work together to provide insurance coverage for large risks.
Generally speaking, syndicates tend to be considered as partnerships or newly-formed corporations for tax purposes.
What Are Syndicates Used For In Insurance?
The insurance industry is centered around risk. Insurance syndicates collaborate to underwrite large or unusual risks and programs. Creating insurance syndicates allows insurance businesses to spread out bigger risks while still maximizing the potential reward. Syndicates write about ⅕ of all surplus lines premiums.1
Lloyd’s of London Syndicates
Lloyd’s of London is an insurance and reinsurance marketplace. It is not an insurer, however, it provides a setting for its members to do business. Lloyd’s members operate as syndicates. Lloyd’s syndicates provide insurance coverage for unique risks with more confidence because they form insurance syndicates.
Players in the Surplus Lines Insurance Industry
There are so many moving parts in the surplus lines industry. Here are some key terms you need to understand in order to navigate surplus lines. Read More.
What You Need to Know When Filing Surplus Lines in California
Syndicates involved in policy writing must be reported. Only syndicates which appear on the most recent NAIC Quarterly Listing Alien Insurers are eligible to transact surplus line insurance in California. Read More.