Page 33 - Reinsurance Management IC85

The Insurance Times

Q. What are the rating factors taken into
account by underwriters in arriving at the
premium for excess loss cover?

Ans. The factors taken into account for determining the rate
for excess loss cover are :-
a. The normal amount of losses to be expected on
the cover,

b. A reserve towards a worsening of the loss
experience

c. Provision for any catastrophe loss

d. Acquisition costs,

e. Margin for profits.

Q. What are the main methods of expressing the
excess of loss cover premium?

The main methods are
a. Charging a flat premium
b. A fixed rate applied to the premium income with

respect to the portfolio.
c. Variable rate based on 'Burning cost'

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