Types of Reinsurance

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Facultative Reinsurance

  • Facultative Reinsurance denotes a certain portion or all portions of a single policy wherein reinsurer and insurer can separately negotiate on accepting or declining individual submission.
  • Our team has credibility, skills, and experience in handling not only complex and large risks but also niche products that are most specific in nature and need special attention.
  • With our excellent relationship with Reinsurers, we are committed to provide adequate reinsurance solutions to our clients on single risks keeping in mind the quick turnaround time that needs to be maintained for closing facultative accounts, for both proportional and non proportional.

Treaty Reinsurance

  • Treaty Reinsurance signifies pre-arrangement between the reinsurer and insurer which provides financial terms along with technical scope that is applicable to each class of reinsurance business and is an annual or multiple years contract. The reinsurer is obliged to accept all the risks mentioned in the contract.
  • Our team has immense knowledge, expertise, and experience in structuring, designing, and providing tailor-made solutions to our clients across all lines of Treaty business.
  • Types of Treaty Business

    • Quota Share
      A fixed proportion of every risk in each class of business is ceded. Premium and losses are shared proportionally with the Reinsurers.
    • Surplus
      Ceding company decides retention on each risk and cedes the balance to the Reinsurer. Capacity is defined in terms of line, a line being the amount of ceding company’s retention. Surplus treaty is arranged in multiple of lines.
    • Quota Share cum Surplus
      It is a combination of Quota Share and Surplus arrangement.
    • Facultative Obligatory
      Ceding company has the option to cede (no compulsions) however the Reinsurer is bound to accept (no option to decline) under the treaty arrangement a share of the specified risk offered by the ceding company.
    • Excess of Loss
      In an excess of loss contract, the reinsurer agrees to pay the reinsured all losses which exceed a certain specified limit in respect of any one risk or any one event. There are two ways of arranging excess of loss covers. Working covers / Risk Excess of Loss Event/ Catastrophe covers
    • Stop Loss / Aggregate Excess of Loss
      In this treaty the ceding company would recover once the loss ratio of the portfolio covered, after adjusting all available recoveries from other treaties, e.g. surplus, quota share, excess of loss, exceeds the agreed % loss ratio limit, the Attachment point.
      Stop-loss reinsurance take effect after a certain threshold has been exceeded in claims.
      Aggregate excess reinsurance limits the amount an insurance company has to pay out over a specific period. Aggregate excess reinsurance is also called stop-loss reinsurance. The excess loss limit may be expressed as a percentage of total expected losses or as a fixed amount.

Retro Reinsurance

  • Retrocession — a transaction in which a reinsurer transfers risks it has reinsured to another reinsurer. This can be by way of proportional and / or non-proportional reinsurance contract.

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