What is a bordereaux in insurance?

A bordereau is a detailed report sent from an MGA or coverholder to the capacity provider (carrier or insurer), listing the risks written, premium collected, or claims incurred under a delegated authority arrangement. It is how a carrier sees what has been done with the authority it delegated.

Bordereau or bordereaux?

Bordereau is the singular and bordereaux the plural, following the French original. In practice the market uses "bordereaux" for both, and you will hear "a bordereaux" as often as "a bordereau". Neither will raise an eyebrow.

Both are pronounced the same way, bor-der-OH, with the final x silent. The abbreviation BDX is used interchangeably in day-to-day conversation and in system field names.

The three types of bordereaux

The Lloyd's market's coverholder reporting standards define three bordereaux, and most carriers outside Lloyd's have converged on the same three. They answer different questions, and a carrier typically wants all three.

Risk bordereaux

The risk bordereaux is the exposure record. It lists each risk bound in the period with enough detail for the carrier to aggregate and model it: insured name, risk location, peril or coverage, sum insured or limit, deductible, inception and expiry dates, and where relevant construction, occupancy, and year built.

This is the bordereaux carriers most often care about first, and the one MGAs most often under-deliver. Its purpose is aggregate exposure management and catastrophe modelling. A carrier cannot tell you its total wind exposure in a given postcode if it does not know the locations it is on risk for. Because of that, risk data is frequently required whether or not the premium has been collected yet, which is why the risk and premium bordereaux do not always reconcile line for line.

Premium bordereaux

The premium bordereaux is the financial record of what was written. Typical contents:

• Policy identifiers: policy and endorsement reference, insured name, inception and expiry
• Premium: gross written premium, net premium, and the transaction type (new business, renewal, endorsement, cancellation, or return premium)
• Deductions: coverholder commission, producing broker commission, and any fees
• Taxes and levies: stamp duty, insurance premium tax, fire services levies, and similar, calculated per jurisdiction
• Settlement detail: currency, rate of exchange, and the period the entry settles in

One distinction causes more argument than any other: written versus collected. A premium bordereaux reporting everything bound tells the carrier what it is owed. One reporting only what has been banked tells it what it is actually getting. Binding authority agreements specify which, and they do not always specify clearly. Mismatches here are a common source of disputes at settlement.

Claims bordereaux

The claims bordereaux reports claims activity on the delegated book. Typical contents:

• Claim identifiers: claim reference, the policy it attaches to, date of loss, and date notified
• Cause and status: cause of loss, and whether the claim is open, closed, reopened, or declined
• Amounts: paid indemnity and paid expense, usually reported separately, plus outstanding reserves for each
• Movements: the change in reserves and payments since the previous report, which is what the carrier uses to track development
• Recoveries: salvage, subrogation, and any reinsurance recoveries

Claims bordereaux are often split into paid and outstanding schedules, either as separate reports or separate tabs, because the two are used differently: paid drives cash settlement, outstanding drives reserving.

Other bordereaux you will encounter

Beyond the three standards, a few others come up depending on the arrangement:

• Settlement bordereaux or statement of account: not an exposure or claims report but a cash one, setting out what is actually being remitted once premium due, claims funding, and commission are netted off against each other
• Reinsurance bordereaux: where business is ceded onward, reporting the cessions to the reinsurer or to each participant on a lineslip or consortium in proportion to their share
• Aggregate versus transactional: some carriers accept period totals, most now require line-by-line transactional detail. Aggregate reporting is faster to produce and nearly useless for modelling

How often are bordereaux submitted?

Monthly is the norm for delegated authority business of any volume, and it is what Lloyd's coverholder reporting works to. Quarterly submission still appears on smaller or lower-volume binders. The binding authority agreement sets the frequency, the submission deadline after period end, and the format.

Format is rarely standardised in practice. Lloyd's publishes standard templates, but many carriers layer their own requirements on top, so an MGA with five carrier relationships is usually producing five differently-shaped reports from the same underlying data.

Why bordereaux matter

Bordereaux are the primary mechanism by which carriers monitor their delegated authority arrangements. When a carrier grants an MGA or coverholder authority to bind on its behalf, it has handed over the pen. The bordereaux is how it finds out what was written, what premium is owed or collected, and how claims are developing.

They are also a regulatory and capital requirement, not just a commercial courtesy. Carriers need exposure data to report aggregates to their own regulators and reinsurers. Late or incomplete bordereaux are a recurring audit finding against coverholders, and a reason binders get withdrawn.

Why bordereaux are hard to produce

The data for a single bordereaux usually lives in three or more places: risk and policy detail in the underwriting system, premium status in the bank or accounting system, and claims somewhere else again. Producing one means pulling from each, working out what has changed since the last report, calculating taxes per jurisdiction, and reshaping everything into each carrier's template.

That is typically 1–2 days per carrier per period, it is error-prone, and the report is already out of date when it is sent. The alternative is to generate bordereaux entries as transactions happen rather than compiling them retrospectively, so the report is a view of the ledger rather than a monthly project. Our guide on how to automate bordereaux walks through that approach.

Related terms

• Delegated authority in insurance, the arrangement that creates the need for bordereaux
• What is an MGA?, the intermediary that typically produces bordereaux
• How to automate bordereaux, practical guide to eliminating manual BDX