Page 60 - Life Insurance underwriting Ebook IC 22

The quantum of liability which a direct insurance company takes on is

known as retention limit

A direct insurer may have more than one reinsurer with whom they
enter into treaty arrangement sometimes the reinsurance

arrangements are product based.

1.4. Factors for retention limit

Some of the factors on which the retentions limit are fixed are

a) The risk appetite of the direct insurer

b) The size of the company and its years of existence
c) Quality and experience of underwriters

d) Surplus of different insurance companies
e) Quality of business sourced

1.5. Retrocession

Retrocession is a process in which a reinsurer reinsures its risk with

another reinsurer

Retracement transfer the risk to another retrocedent

Retrocessionaire is accept the risk from another reinsurer

1.6. Difference between

a) A contract between insurer and customer

b) A contract between insurer and reinsurer

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