Definition:Quotation
📋 Quotation in insurance is a formal or semi-formal offer from an insurer or underwriter that specifies the premium, coverage terms, deductibles, exclusions, and conditions under which a particular risk would be accepted. It serves as the pivotal document in the pre-bind negotiation between the insured (or their broker) and the carrier, translating the underwriting assessment of a submission into a concrete commercial proposition.
⚙️ The process begins when an broker or applicant submits risk information — often via a submission form or digital API call — to one or more underwriters. The underwriter evaluates the data against underwriting guidelines, applies rating factors, consults loss history and exposure models, and produces a quotation outlining the offered terms. In commercial lines, quotations frequently go through several rounds of negotiation: the broker may request adjustments to sublimits, retentions, or endorsements, and the underwriter responds with revised quotes. In personal lines and small-commercial segments, the process is increasingly automated through quoting platforms that return indicative or bindable quotes in seconds.
💡 A quotation is not yet a contract — it becomes one only when both parties agree and the risk is bound. Still, it carries significant weight. Once issued, a quotation establishes the terms a carrier is willing to offer, and in many markets it remains valid for a stated period, during which the underwriter is commercially expected to honor it. For brokers, securing competitive quotations across multiple markets is the core of their value proposition. The shift toward digital quotation workflows has reshaped market expectations around speed and transparency, with insurtechs and tech-enabled MGAs using real-time data and predictive analytics to compress what once took days into minutes.
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