The cover slip

A promise of 1,000,000 is a liability the moment it is published, long before anybody wins it. This desk takes that liability apart: what the peril is, how much of it a promoter keeps, how an expected loss of 3,510 becomes a premium of 4,914, what the limits do, and why the claim and the winner run on two clocks ten days apart.

Open the partner account Read a promotion first

Slip stub

Sample promotion: Unbeaten Season, one named team
Sum insured: 1,000,000.00 at a 0.351% peril rate
Expected loss: 3,510.00, against a premium of 4,914.00
Retention: 42,000.00 - so 23.8 times the retention is transferred
Qualifying accounts: 125,000, or 0.0393 of premium each

the perilOne stated act that must happen for the prize to be owed - and the estimate of how often it has

the retentionThe largest prize the promoter funds from the promoted product’s own margin, before any cover responds

the coverA schedule of twelve fields that indemnifies the promoter, and is never a reader’s protection

Desk The Cover Slip, cycle 62 of the series · Subject the risk transfer behind a promoted prize - the promise, not the advertisement · Unit the peril - the single thing that must happen for the prize to be owed · Sample promotion one invented offer: 1,000,000 if a named team completes a league season unbeaten · Rates used 125,000 qualifying accounts and a 0.351% estimate of the peril · Not quoted no real company’s promotions, premiums, limits or figures anywhere on this site

Direct answer A promoted prize is owed by the promoter that advertised it, never by the insurer behind it. The promoter either keeps the risk or transfers it: it estimates the peril, keeps a retention it can fund from the promoted product’s own margin, and buys cover for everything above that line at a premium built from the expected loss plus the insurer’s load.

The promise exists before the winner does

A published prize is a liability on the day it is published

The moment an offer says that 1,000,000 will be paid if a stated thing happens, the promoter has written a contingent liability. It is not a forecast and it is not a marketing figure: it is a term, enforceable on its own words, and it sits on the promoter’s side of the line whether or not anybody ever claims it.

That is why this desk starts with the peril rather than the prize. The prize fixes the size of the exposure; the peril fixes the probability of it; and the product of the two is the number the promoter actually has to plan for.

Only one party owes the reader anything

A reader who wins a promoted prize has a claim on the promoter. If the promoter bought cover, the insurer pays the promoter under a contract the reader is not party to. The reader’s position is unchanged by the arrangement: better if the insurer pays, identical if it does not.

The distinction is not pedantry. Every question about a disputed prize collapses into it: who decides that the peril happened, who bears a declined claim, and which clock the money runs on.

Moving a risk costs more than the statistic says

The expected loss is the honest starting point and it is not the price. The insurer adds a load for uncertainty, for expenses and for its own margin, so a risk with a 3,510 expected loss is not sold for 3,510. On the desk’s sample terms it is sold for 4,914 - 1,404 more than the statistic, which is 28.6% of the premium.

The promoter buys that difference deliberately. It is paying to remove a 1,000,000 hole, not to save money on average.

The desk’s unit is the peril, not the promotion

Two promotions can both promise 1,000,000 and be nothing alike: one may state a peril that has happened twice in 570 seasons, the other a peril that has never happened at all. Comparing the prizes says nothing. Comparing the perils says everything, which is why every figure on this desk is stated per peril.

The sample promotion, in one columnprize published 1,000,000.00 peril estimate 0.351% (2 of 570 league-seasons) expected loss = 1,000,000.00 x 0.00351 = 3,510.00 insurer load 40.0% = 1,404.00 premium = 3,510.00 + 1,404.00 = 4,914.00 cost per qualifying account = 4,914.00 / 125,000 = 0.0393 prize as a multiple of retention = 1,000,000.00 / 42,000.00 = 23.8

The sample is invented, and used everywhere. The promotion, the promoter, the peril estimate, the retention and the premium on this desk all belong to one described sample. No real operator’s promotional terms, cover schedule or premium is quoted, and no figure here is a forecast about any real team, league or offer.

peril 0.351%retention 42,000.00premium 4,914.00two clocks 10 days apart

Keep or transfer

The line where a promoter stops carrying its own promise

The price of the cover

Expected loss, load and premium, built from one column of arithmetic

The claim

Two clocks ten days apart, and the evidence that decides between them

Reading a promotion

Eight questions that show who carries the risk

The schedule - the six fields that decide a claim, and which side of the line each one protects
The field	What it says on the sample	What it decides	Side of the line	Published?
the defined peril	the stated act, word for word	whether the claim is inside the cover at all	transferred	no
the sum insured	1,000,000.00	the largest prize the arrangement can answer	transferred	no
the per-event limit	the most paid for one occurrence	a ceiling on a single settlement	transferred	no
the aggregate limit	the most paid across the period	a ceiling on the whole year	transferred	no
the retention	42,000.00 carried by the promoter first	the frequency the promoter keeps	kept	no
the notification window	7 days from the peril	whether a valid claim can be declined on time alone	a condition	no
The whole schedule	12 fields in all	6 decide, 6 administer	4 transferred	0 of 12 published

Not one of the twelve fields appears in the promotion a reader sees. The offer publishes the promoter, the period, the act, the prize and the route to claim, and the only thing it shares with the schedule is the wording of the peril. A reader can win a prize without ever knowing whether the risk was transferred.

The ladder - five lines from a published prize to a premium, and what each line is
The line	Amount	Where it comes from	Share	What it is
The prize published	1,000,000.00	the base	100%	what the reader is promised
The peril, estimated	0.351%	2 of 570	0.4%	the reference set behind the number
The expected loss	3,510.00	prize x peril	71.4%	the honest starting point
The insurer’s load	1,404.00	40.0%	28.6%	uncertainty, expenses and margin
The premium	4,914.00	loss + load	100%	cost per qualifying account, 0.0393
From promise to price	1,000,000.00 of exposure	0.351%	4,914.00	0.0393 per account

A million-pound promise costs 4,914.00 to move. The expected loss is 3,510.00 and the premium is 4,914.00, so the promoter pays 1,404.00 - 28.6% of the premium - for the removal of a hit it could not absorb, which is 23.8 times the retention it keeps.