Page 265 - Reinsurance Management IC85

Reinsurance Management

an excess of loss cover to protect the treaty
portfolio. They are also ready to offer
adjustments in commission, profit commission and
reciprocity terms to keep the treaty exchanges
balanced.

D. Other Issues In Negotiations
The surplus treaty is split into two or three
surpluses primarily with a view to obtain the best
possible commission terms for the business. Hence
particular attention is paid to the balance of the
portfolio with regard to the first surplus treaty
while a sufficient volume of premium should be
generated for the second and higher surplus to
make it marketable. On the higher surpluses,
reinsurers will normally want to know a great deal
of background information dealing with rate levels
and claims.

Auto/Fac covers derive their premium from a
limited number of risks only. Reinsurers require
some detailed information regarding the
portfolio of business ceded thereunder although

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