LMX stands for London Market Excess of Loss. It is not purely a Lloyd’s of London phenomenon, but refers instead to both syndicates and companies operating in the London insurance market place. The type of hazard involved is excess of loss reinsurance of other excess of loss reinsurers; it is also known as retrocessional cover.
When giving LMX cover, a reinsurer protects all the individual risks written by the syndicate or company he reinsures. In his turn this reinsurer will purchase LMX cover for all of his writings from reinsurers who will (in return) seek their own separate excess of loss protections. It is conceivable that the first reinsurer will participate in the reinsurance programme of one of these reinsurers, thus in effect assuming (albeit indirectly) an element of the risks he himself originally reinsured
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