Page 245 - Reinsurance Management IC85

Reinsurance Management

The formula is -
Paid Losses + Outstanding Losses
----------------------------------------- X 100
Treaty Period GNPI

Loaded Burning cost :
The Pure Burning Cost is loaded by a suitable factor
to cover costs of acquisition, expenses of
management, reserve for catastrophe, element of
profit. It is usual to note in practice a loading of 25
to 30%.

Loading is done as follows - 100
Paid Losses + Outstanding Losses -------
------------------------------------- X 70
Treaty Period GNPI

OR

Paid Losses + Outstanding Losses 100

------------------------------------------ X-----

Treaty Period GNPI 75

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