Page 169 - Reinsurance Management IC85

Reinsurance Management

iv) In addition the ceding reinsurance
commissions received will add to the net
results of the ceding insurer.

v) In a given year the reinsurer will have to pay for
large risks and higher than average losses and
proportional treaties are in place to iron out the
variation in results that occur from year to year.

vi) Depending on type of risks underwritten and the
hazard in their locations the insurer will set
different retentions according to the degree of
exposure to loss involved. This will lead to setting
up of table for retention.

vii) Fire business is vulnerable to large losses arising
on a single large risk, from natural perils and to
an abnormal increase in aggregate losses during
a revenue year.

This can be taken care by having excess of
loss cover in place. Facultative, working excess

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