Page 318 - Reinsurance Management IC85

Reinsurance Management

which may constitute expenditure under a
profit commission calculation.

Ans: Reward for profit to the insurer from the reinsurer.
A profit commission is a reward to the insurer from
the reinsurer in return for business ceded under the
reinsurance treaty producing a profitable result
dependent upon the loss ratio.

Any three of the following.
u Losses.
u Outgoing loss portfolio/outstanding losses.
u Premium reserves retained by reinsured.
u Outgoing premium portfolio.
u Ceding commissions/acquisition costs.
u Reinsurer expenses.
u Deficit carried forward.

Q11. What are the constituent elements of an excess
Ans: of loss premium?
u Risk premium to cover the average loss cost.
u Fluctuation premium to cover random deviations

of the claims experience.

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