Page 43 - Reinsurance Management IC85
P. 43
The Insurance Times
Minimum rate = 3%
Hence the premium for XL cover = Min. rate x
GNPI
3% x 10,00,000
Rs. 30,0007
Q. Enumerate the common problems
encountered by underwriters in rating of
excess of loss covers.
An underwriter uses past results as a guide to
determine rates based on burning cost, loading
and claims experience. The following are the
common problems encountered by the
underwriter in rating of an XL cover.
a. Claims development
b. Inflation
c. Currency movement
d. Changes in law
a. Claims development: The loss figures in the
claims statistics may not always be the final cost
of claims. In case of motor and liability classes,
details of individual claims paid and outstanding at
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