Page 335 - Reinsurance Management IC85

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portfolio), b) outstanding losses (known as a loss portfolio), or c) insurer
investments (known as a investment portfolio).

Portfolio Runoff

Continuing to reinsure a portfolio until all ceded premium is
earned, or all losses are settled, or both. While a loss runoff is
usually unlimited as to time, a premium runoff can be for a
specified duration.

Portfolio Transfer

The transfer of in-force insurance liability from an insurer to a
reinsurer (or vice versa) by the payment of the unearned premium
reserve on those policies alone, or the concurrent transfer of
liability for outstanding losses under those policies by the
payment of the outstanding loss reserve from the insurer to the
reinsurer (or vice versa). The former is a premium portfolio, the
latter a loss portfolio.

Professional Reinsurer

A term used to designate an organization whose business is mainly
reinsurance and related services, as contrasted with other insurance
organizations which may operate reinsurance assuming
departments in addition to their basic primary insurance business.

Profit Margin

As a pricing factor (along with expenses and losses), the return
the reinsurer expects from the degree of net risk taken. As with
any investment, the reinsurer expects a larger return from risky
than safe investments.

Pro Rata Reinsurance

A generic term describing quota share and surplus share
reinsurance in which the reinsurer shares a proportional part of

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