Page 168 - Reinsurance Management IC85

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ix) Extent reinsurance in place for each class.
x) Ratio of net premiums written to policy holder

surplus

Q8. What are the re-insurance aspects of Fire
and Marine Classes of direct insurance
business ?

Ans: Reinsurance aspects of Fire business are:
i) As large volumes of business are generated
generally proportional treaties are favored.

ii) Fire losses of varying size occur regularly. The
proportional treaties under these circumstances
provide an effective means of stabilization of
results of the portfolio.

iii) From insurer’s point of view the volatility of the
gross business is not reflected in his results of
net of reinsurance. The results net of reinsurance
will be stable. The net retained business can be
protected by catastrophe excess of loss.

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