RMI-4292 Lecture Notes - Lecture 8: Reinsurance, Underwriting, Gen Re
2 Apr 2019
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Document Summary
Basic terms and concepts: primary insurer, ceding company, reinsurer, reinsurance agreement, treaty contracts. In writing: facultative contracts, may be simply an agreement or email, retention, exposure the ceding company retains, ceding commission, retrocession, where reinsurers buy reinsurance from each other. Increase large-line capacity: provide catastrophe protection, stabilize loss experience, provide surplus relief, facilitate withdrawal from a market segment, provide underwriting guidance. Reinsurance sources: professional reinsurers, swiss re, general re, primary insurers reinsurance department, pools syndicates associations, syndicates, largest in the world is lloyds of london, pools, primary or lead underwriter, everyone else behind, associations, loose knit. Capital market alternatives: catastrophe bond, catastrophe risk exchange, pooling or association before the event, can agree to do it after the fact, contingent surplus note, another form of financing. Industry loss warranty: catastrophe option, line of credit, sidecar. Program design: needs, growth plans, types of insurance sold, geographic spread of loss exposures, senior management"s risk tolerance.
