Mechanism by which several underwriters each take a fraction of the same risk, making bearable an exposure none could carry alone.
Syndication consists in spreading a risk too heavy for one carrier among several who each take a bearable share, the sum of the shares covering the uncoverable. Born in the London coffee houses around the slip, where each underwriter wrote their name beneath a line with the percentage accepted, it solves two problems at a stroke, it makes the risk bearable for each carrier and automatically diversifies its exposure. It still structures the placement of large industrial risks and, beyond them, the whole architecture of coinsurance and reinsurance. Its power appeared with the sinking of the Titanic, whose loss, spread among some sixty syndicates and a dozen companies, was absorbed without any carrier collapsing.
The placement of a large exposure proceeds as on the first day, a broker presents the risk, a leader fixes the price and a share, the followers each take a percentage until the cover is complete.
syndication, placement par lignes, partage de ligne