Page 119 - Reinsurance Management IC85

Reinsurance Management

Q. Briefly explain some of the considerations to
be kept in mind while finalizing the inward
reinsurance programme for one year.

Ans: Important points to be considered while finalizing
inward reinsurance.
1. Treaty or Facultative: Pros and cons

2. Territorial scope - Geographical spread

3. Director or through brokers

4. Class of business i.e. property or casualty business

5. Acceptance limits - Depends on financial standing
and premium income of the company

6. I.R.D.A. norms laid down in this regard

The reasons why companies go for inward
insurance are:
1. To achieve a lower expense ratio
2. To obtain a better and wider spread of business
3. To counteract the drain of foreign exchange
4. To earn increased investment income on cash

flows.

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