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"In terms of the indemnity risk, those conversations go on - we have a good precedent for this with the pandemic influenza case of three of four years ago".
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As a percentage of total indemnity payouts, high-liability risk specialty indemnity payouts accounted for 61% compared to 39% for low-liability risk specialties (Table 1).
Similarly, risks and indemnity levels would need to match specific tasks which would subsequently be reflected in pricing.
The average indemnity payment for high-liability risk specialties was $315,314 compared to $267,146 for low-liability risk specialties (p = 0.25).
The average indemnity payment for high-liability risk specialties was $315,314 compared to $267,146 for the low-liability risk specialties (Table 1).
Overall indemnity payments in the high-liability risk specialties, therefore, are much higher than those from the low-risk specialties.
After controlling for the year of the claim, a statistically significant difference (p < 0.001) was seen in the indemnity payout rate between the two risk groupings.
It is not always possible to rely on the paper protection of contractual indemnities (which may involve little practical prospect of recovery) so consider operational measures to mitigate risk and insurance to cover liabilities.
One of the methods to reduce these risks may be income indemnity insurance, which provides benefits for loss if the insured cannot obtain jobs owing to disease.
4. Match rewards and indemnity to the levels of skill and risk required to perform a particular task, not professional title.
We assume that the initial capital or reserve of a reinsurer is regulated by the value-at-risk (VaR) of its promised indemnity.
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