Page 304 - Reinsurance Management IC85

Reinsurance Management

flexibility in the size and types of risks he can
accept.

8. OTHER FUNCTIONS
u Reinsurance enables an insurer to consider
unusual proposals which he normally would
not underwrite.
u Reinsurers may provide to the insurer the
benefit of their expertise on Technical, Rating
and Underwriting, Actuarial, Reserving, Claims
handling and many other aspects relating to
prudent writing of the direct business.
u Reinsurance helps to absorb newer risk
exposures arising from:-
(i) Economic changes
(ii) Social changes
(iii) Changes in insurance methods
(iv) Changes caused by scientific development.

Q.7. Calculate the profit commission (PC)
payable on an annual basis and a three
year average basis for a 2011 treaty, the
details of which are given below :

Sashi Publications - www.sashipublications.com 301

ight@ The Insurance Times. 09883398055 / 0988338