Page 264 - Reinsurance Management IC85

The Insurance Times

is therefore not adequate to be relied upon for
primary reinsurance capacity.

Excess of Loss Treaty : Both working and
catastrophe covers arranged on a layered basis
provide reinsurance protection to the retained
business and enable cost reduction in using
less of proportional arrangements.

Stop Loss Ratio : This is another broad form
of reinsurance to protect a whole portfolio of
net retained business from exceeding an agreed
loss ratio and hence ensure profit to the
insurer..

C. Reciprocal Negotiation
Reciprocal reinsurance trading is considered
important by ceding insurers. They value their
outward treaties that form the basis of their
reciprocal trading. So much so that they tend to
protect the experience of such outward treaty
by measures such as not utilizing the full treaty
capacity for more hazardous risks or arranging

Website: www.bimabazaar.com Call: 033-22184184 / 40078428 262

ight@ The Insurance Times. 09883398055 / 0988338