Aggregating insurance claims and reinsurance claims
Produced in partnership with Andrew Burns QC of Devereux Chambers
Aggregating insurance claims and reinsurance claims

The following Insurance & Reinsurance guidance note Produced in partnership with Andrew Burns QC of Devereux Chambers provides comprehensive and up to date legal information covering:

  • Aggregating insurance claims and reinsurance claims
  • Aggregation—background
  • What are aggregation clauses?
  • Why aggregate insurance claims?
  • 9/11 aggregation
  • Arising from one event
  • Arising from one originating cause
  • Resulting from a series of acts or omission

Aggregation—background

Aggregation remains a major issue in the settlement of insurance and reinsurance claims leading to a number of disputes across the market. Claims managers, arbitrators and even appellate judges appear to take differing views as to what particular policy wordings are intending to achieve in an aggregation clause.

A spate of judicial decisions on the common aggregation wordings in the late 1990s and early 2000s was followed by a quieter period. The prevalence of settlements or commutations, together with the confidentiality of reinsurance arbitrations means that the law in this area has moved on little in recent years. However, the last of the litigation arising from the 9/11 tragedy has provided some insight into the modern approach to aggregation.

What are aggregation clauses?

An aggregation clause is an ubiquitous feature of most insurance and reinsurance contracts, governing what happens if there is more than one claim under the same policy in the same year. It enables two or more separate losses covered by the policy to be treated as a single loss for the purposes of the excess or deductible or for the limit of liability. The test is usually whether the losses are linked by a unifying factor of some kind. However, the nature of that unifying factor gives rise to much debate. In each case, the