Page 128 - Reinsurance Management IC85

The Insurance Times

Hence profit commission = (12,00000/3) x (20/
100) = Rs.80,000

Q2. What are the factors involved in determining
the underwriting philosophy while accepting
inward reinsurance business.

Ans: Factors involved in determining the underwriting
philosophy in inward reinsurance business are:
i) Is it reciprocal or non-reciprocal basis of business
that is accepted? If reciprocal, insurer or reinsurer
will have his own basic treaties to serve as a
medium of reciprocity for inward business. If non-
reciprocal, insurers or reinsurers have no treaties
to serve which will increase their gross and net
premium incomes.

ii) Gross or net lines that are written? Normally an
insurer or reinsurer starting to write reinsurance
business on net lines. Firstly, he has to gain certain
amount of experience in underwriting. Secondly
a retrocession treaty placed abroad, in a hard
market requires great selling. Further the

Website: www.bimabazaar.com Call: 033-22184184 / 40078428 126

ight@ The Insurance Times. 09883398055 / 0988338