Page 303 - Reinsurance Management IC85

The Insurance Times

4. ACCUMULATION OF CLAIMS UNDER
DIFFERENT CLASSES
By arranging an excess of loss reinsurance
protection which operates when claims have
occurred under several lines of business as a result
of the same event, the insurer can limit his total
aggregate commitment from all underwriting lines
and protect his net underwriting result.

5. SPREADS OF RISKS
Reinsurance achieves a wider spread of risks by
writing business in many countries across many
classes.

6. PROTECTION OF SOLVENCY MARGINS
In some countries, government regulations limit the
net retained premium income of insurance companies
in relation to their capital and free reserves well
planned reinsurance programme can ensure long term
profitability as well as compliance of solvency norms.

7. STABILIZE PROFITABILITY
Reinsurance gives to the insurer a far greater

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