Page 140 - Reinsurance Management IC85

The Insurance Times

ceding a certain part of risk to reinsurance
irrespective of their financial strength. A company
with larger risk appetite will cede less risk to
reinsurer.

iv) Profitability. If the insurer foresees lesser losses
emerging from a business or portfolio it would
not like to transfer their risk to reinsurers and
loose on the potential profit by sharing their profits
with reinsurer.

v) Type of risks. Certain types of risk have the
potential to produce large or aggregate losses time
to time in such case to even out the fluctuations
insurers will cede a part of risk to even out the
results.

iv) Spread of risks. When the insurer is exposed to
large number of risks form a geographical region
it would like to reduce its exposure by ceding
certain share of risk to reinsurer to minimize its
exposure.

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