Page 193 - Reinsurance Management IC85

Reinsurance Management

b) What are the points to be considered
while deciding whether or not
placement of re-insurance program
should be done using intermediaries?

Ans: a. The Objectives to be kept in mind while designing
a reinsurance programme is as below:-

Primary Objectives :
An effective reinsurance program should primarily
achieve the following objectives:
The primary objective of reinsurance is that
u It should reduce the company's probability of

bankruptcy at a price acceptable to the company.
u It should stabilize any fluctuation in the company's

annual aggregate claims experience so that wide
fluctuations in results from one year to the next
are avoided;
u Reinsurance can be used to allow a company to
accept risks beyond its normal retention and so
ensure that it is not placed at a serious
disadvantage compared to its competitors;
Other Objectives :
A. Technical -
The technical results of the insurer / reinsurer needs

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