Page 157 - Reinsurance Management IC85

Reinsurance Management

will allow good risks to enter the books and
also bad risks are charged appropriately.

iv) Accumulation of too much risk in a particular area
will expose the reinsurer for heavy losses.

v) Retention of the insurer will indicate the risk
bearing capacity of insurer.

vi) Commission and profit commission which the
insurer will get will also plays a vital role.
Insurance company will look for higher
commission rates.

vii) Any premium and claim reserves involved. These
reserves are held in the trust of insurers. These
are released at the end of the year to reinsurer.
They carry very less interest rates and are loss
for reinsurance company as they are loosing on
income from these amounts.

viii) Credit rating of the reinsurance company. Higher

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