Reinsurance facility used by insurance companies for certain types of undesirable insurance business. An allowance payable to the CEDING COMPANY in addition to the normal CEDING COMMISSION, based on a predetermined percentage of the REINSURER’s net profits after a charge for the reinsurer’s overhead, which is derived from the subject treaty. Also CLASS OF BUSINESS. Also CUT-THROUGH ENDORSEMENT, ASSUMPTION CERTIFICATE, ASSUMPTION OF LIABILITY ENDORSEMENT – ALE. Also UNAUTHORIZED REINSURANCE. Also INDEX CLAUSE. The general classification of business as utilized in the insurance industry, i.e., fire, allied lines, homeowners, etc. The slow, gradual reduction of members in a company or organization due to retirement, resignation or death. Also CLAIMS-MADE COVERAGE and CLAIMS-MADE INSURANCE. An ENDORSEMENT added to an insurance policy to provide that, in the event of the insolvency of the insurance company, the amount of any loss which would have been recovered from the REINSURER by the insurance company will be paid instead directly to the policyholder by the reinsurer. Also CLAIMS-MADE COVERAGE and CLAIMS-MADE POLICY. See LOSS RESERVE. The existence and scope of offset or set off rights may be determined by contract language as well as statutory, regulatory and common law. Also PROSPECTIVE RATING, RETROSPECTIVE RATING. Compare RETROSPECTIVE RATING and PROSPECTIVE RATING. Compare DEPOSIT PREMIUM. Arrangements by which an authorized insurer, for a specified fee or premium, issues its policy or policies to cover certain risks underwritten or otherwise managed by unauthorized insurers and then transfers all, or substantially all, of its liability to such unauthorized insurers by means of reinsurance. The amount of premium (usually for an EXCESS OF LOSS REINSURANCE contract) that the CEDING COMPANY pays to the REINSURER on a periodic basis during the term of the contract. A provision found in many reinsurance contracts whereby the parties agree to submit their disputes using the law of an agreed state or forum to a non-judicial tribunal of their own choosing rather than a court of law; generally subject to selection criteria and procedures set out in the clause, which produces an opinion or a decision ultimately enforceable by a court of law. A reinsurance protection specifically designed to cover the hazard of extensive and widespread fire damage. Also REINSURANCE WARRANTY. Also OFFSET. A contractual provision, generally required by statute or regulation as a prerequisite to receiving credit for REINSURANCE, in which the parties agree to effect all transactions through an INTERMEDIARY and the credit risk of the intermediary, as distinct from other risks, is imposed on the REINSURER. In reinsurance, the sum of all income from reinsurance operations less the related expenses but not those expenses relating to MAJOR LOSSes and reinsurance protection. The reduction of the amount owed by one party to a second party by crediting the first party with amounts owed it by the second party. An individual who negotiates reinsurance contracts between the CEDING COMPANY and the REINSURER(s). The maximum amounts of interest insured. A form of EXCESS OF LOSS REINSURANCE which indemnifies the CEDENT in respect of an annual loss ratio on a particular portfolio in excess of a stipulated level. This model is likely to remain the most important Self explanatory clause which provides that the reinsurance agreement is considered by the parties as an honorable undertaking. The percentage of premium used to pay all the costs of acquiring, writing and servicing insurance and reinsurance. A term used to indicate that, unless canceled by either party, the proposed contract would remain in effect. Also CLEAN-CUT. 2. a. Also ORIGINAL POLICIES and ORIGINAL TERMS. Amounts of ceded losses withheld from the REINSURER by the CEDENT in order to provide the cedent with collateral security for the due performance of the obligations of the reinsurer under a REINSURANCE TREATY. A term used to describe the joint interests of a CEDING COMPANY and its REINSURER or REINSURERs. Also AUTOMATIC FACULTATIVE BINDER, FACULTATIVE TREATY. Also LOSS LOADING, LOSS CONVERSION FACTOR. Also AUTHORIZED REINSURANCE. Factors driving cyber sales on the reinsurance side include: • A 25 percent year-over-year increase in direct sales of cyber cover, increasing the size of insurer portfolios. An agreement by which one insurance or reinsurance company takes over or assumes the liabilities of another insurer or REINSURER. Also ARBITRATION CLAUSE and JURISDICTION CLAUSE. The purpose of which is not to be defeated by a strict or narrow interpretation of the language thereof. The combined ratio was 80.1% in the latest quarter, up 5.8 points from 74.3% in Q3 2014. Also included in this category are reserves for unearned premiums before or after retrocession. Compare EVERGREEN CLAUSE. Restate historical losses for coverage changes following recent hurricanes 3. Compare CONTINGENT COMMISSION, PROFIT COMMISSION and OVERRIDING COMMISSION. Pre-tax catastrophe losses in the amount of $300 million, this amount is net of reinsurance … Also FACULTATIVE REINSURANCE. Creation of a fund by an insurer to absorb long beyond the insurer’s normal RETENTION. A term used to describe a broad spectrum of treaty reinsurance arrangements which provide reinsurance coverage at lower margins than traditional reinsurance, in return for a lower probability of loss to the REINSURER. • Growing concerns about escalating attritional losses and the fear of a systemic or catastrophic loss … Also RISK EXCESS. A warranty to the REINSURER that the CEDING COMPANY will retain (net) a specified amount of insurance or that no higher layer of EXCESS OF LOSS REINSURANCE is carried. Compare GUARANTEE ENDORSEMENT. The loss reserve value established by insurance and reinsurance companies in recognition of their liability for future payments on losses which have occurred but which have not yet been reported to them. This is a wider application of the ordinary STOP LOSS REINSURANCE treaty in that it applies to the entire portfolio of one branch of the REINSURED’s activities. The definition of LAE depends on the terms of the reinsurance contract. A system used in REINSURANCE whereby the REINSURER is liable only for all losses that occur during the currency of the treaty, irrespective of when the risk attached. Also ADMITTED REINSURER. INTRODUCTION Also DIRECT WRITING REINSURER. Credit is given in the CEDING COMPANY’s ANNUAL STATEMENT for reinsurance provided by an admitted reinsurer. A variation of the STABILITY CLAUSE. Also SURPLUS SHARE REINSURANCE. Also SUBJECT PREMIUM, PREMIUM BASE, UNDERLYING PREMIUM. The amount of insurance or REINSURANCE on a risk (or occurrence) which applies to a loss before the next higher excess layer of insurance or reinsurance attaches. Also SEMI-OBLIGATORY TREATY and SEMI-AUTOMATIC TREATY. Also BROKER. REINSURANCE for which credit is given in the CEDING COMPANY’s ANNUAL STATEMENT because the REINSURER is licensed or otherwise authorized to transact business in the jurisdiction in question. Also used to refer to the maximum amount of business (premium volume) which a company or the total market could write based on financial strength. 1) Certain high value risks e.g., bridges, tunnels and fine arts collections which are excluded from reinsurance contracts and release the REINSURER of any potential high accumulation of liability on any one risk from various sources, 2) a large hazardous risk on which insurance is difficult to place, or 3) a large attractive risk which is considered a target for competing insurance companies and producers. Arch’s loss ratio in reinsurance was 44.5% in Q3 2015, up 2.8 points from 41.7% in Q3 2014. Attritional (non-cat) versus large versus cat losses 3. Change ), You are commenting using your Facebook account. A REINSURER is “admitted” when it has been licensed or recognized by an insurance authority or statutory body of a state or country and, as such, must submit itself to or conform to statutory regulations. Also DIRECT WRITER. Reserving, Large Claims, Reinsurance, Stochastic Modeling, Simulation, Capital Modeling, IBNR. Under this plan, the REINSURER takes a three-year experience block of time, sets a minimum and maximum rate, and bases the developed rate on loaded losses. Strong premium growth in facultative risk and property and casualty treaty reinsurance in the US, Canada, and Latin America; Attritional combined ratio of 83.0%, excluding catastrophe and Pandemic losses vs. the prior year comparative figure of 84.0%; Combined ratio of 105.4%, which included catastrophe losses of 16.3% and Pandemic losses of 6.7% A claims-made policy can provide for varying limitations as to the length of time prior to the policy period during which the loss event could have occurred (the “retroactive period”) or the length of time after the policy has terminated during which the claim must be presented (the “tail” or “extended reporting period”). Also CLASH COVER and CONTINGENCY (EXCESS) COVER. The insurer that CEDEs all or part of the insurance or REINSURANCE risk it has written to another insurer/REINSURER. Also EXPERIENCE RATING, LOSS RATING. In many contracts this clause replaced the TARGET RISK CLAUSE. Also LOSS RATING, MERIT RATING. A qualification in a slip which indicates that any inaccuracy in underwriting information supplied is to incur no penalty. A form of REINSURANCE TREATY required by companies engaged in business requiring large policies, providing for the lines which are too large to be embraced in a FIRST SURPLUS TREATY. Also SPECIFIC REINSURANCE. A system of rating an EXCESS OF LOSS REINSURANCE contract by applying a loading factor to the actual claims cost over an appropriate block period, usually 3 years, to produce the premium. Compare POLICIES ATTACHING BASIS. A clause in a reinsurance contract which stipulates that losses relating to risks which have a total insured value in excess of a given amount will not be protected under the contract. Also ADMITTED REINSURANCE. Also ARBITRATION CLAUSE and CHOICE OF LAW CLAUSE. GROSS ORIGINAL PREMIUM after deduction of returns of premium and premiums paid for reinsurances, recoveries which would inure to the benefit of the REINSURERs. The deposit premium will be adjusted to the higher of the actual developed premium or the minimum premium after the actual SUBJECT PREMIUM has been determined. Also AUTOMATIC FACULTATIVE TREATY, FACULTATIVE TREATY. Reinsurance protection, arranged without a finite monetary limit. The clause in a reinsurance agreement which provides for the valuation, payment, and complete discharge of all obligations between the CEDING COMPANY and the REINSURER, including future obligations for reinsurance losses incurred. While Catastrophe activity in the first-quarter of 2019 was muted when compared with other Q1s, elevated attritional losses in the period is expected to pressure the margins of some Property and Casualty (P&C) insurers and reinsurers, warn Goldman Sachs analysts. Risk Excess Loss Coverage is available where the exposure can be clearly defined territorially, … A gradual reduction in number or strength because of stress or military action. Also CLAIMS-MADE INSURANCE and CLAIMS-MADE POLICY. The expense incurred by the CEDING INSURER in the defense and settlement of claims under its policies but not the insurer’s overhead expenses. The expense incurred by the CEDING INSURER in the defense and settlement of claims under its policies but not the insurer’s overhead expenses. The contract merely reflects how individual FACULTATIVE REINSURANCE shall be handled. A system used in REINSURANCE whereby the REINSURER is liable only for all losses that occur during the currency of the treaty, irrespective of when the risk attached. Also CLAIM EXPENSE, LOSS ADJUSTMENT EXPENSE – LAE, ADJUSTMENT EXPENSE. An insurer domiciled outside the United States or outside a specific state. Compare LEAD REINSURER. The intermediary generally represents the ceding company and receives a commission, almost always from the reinsurer(s), for placing the business and performing other necessary services. Also sometimes used to describe losses before reduction for inuring reinsurance. All content copyright © Steve Evans Ltd. 2021 All rights reserved. Also LIMIT OF LIABILITY. An expression indicating that the terms underwritten by the REINSURER are on exactly the same basis as those of the CEDENT on the original policy. An allowance made by the REINSURER for part or all of a CEDING COMPANY’s acquisition and other costs, including taxes. Also COMMUTATION CLAUSE. Also PROFIT COMMISSION. An insurance or reinsurance company which “carries” or writes the insurance liability of another insurer. Type of EXCESS OF LOSS REINSURANCE treaty protecting a CEDING COMPANY against accumulation of the NET LOSS from a single event or series of events affecting a number of classes of business after the operation of all other reinsurances. English term or phrase: attritional losses: Index insurance is primarily designed for CAT perils like flood, drought, frost etc. Compare ALLOCATED LOSS ADJUSTMENT EXPENSES – ALAE and UNALLOCATED LOSS ADJUSTMENT EXPENSE – ULAE. Both exposure rating and loss rating can be used by the reinsurance underwriter to determine the price that is quoted. This factor provides for the REINSURER ‘s LOSS ADJUSTMENT EXPENSE, overhead expense, and profit margin. Keywords. A REINSURER is “non-admitted” when it has not been licensed or recognized by an insurance authority or statutory body of a state or country and, as such, does not have to submit itself to or conform with statutory regulations. Also LOSS MULTIPLIER, LOSS CONVERSION FACTOR. Also BASE PREMIUM, SUBJECT PREMIUM, PREMIUM BASE. Reinsurance experience calculated with all applicable premiums and losses assigned to the particular period (usually a 12-month period) in which each reinsured policy becomes effective. Within the context of REINSURANCE, a banking instrument established on a “standby” basis to secure recoverables from NON-ADMITTED REINSURERs to enable the CEDING COMPANY to reduce the provision for unauthorized reinsurance in its STATUTORY ANNUAL STATEMENT. Also LINE SHEET. If a loss does not exceed the excess of loss retention level, only the quota share coverage applies. We provide reinsurance and insurance solutions, from traditional insurance covers to bouquet multi-line structures, in all sectors of the Aviation & Space market: airlines, aerospace, space treaty, general aviation and others. A COMMISSION adjustment on earned premiums whereby the actual commission varies inversely with the loss ratio, subject to a maximum and minimum. A broad term used to designate a group or groups of individuals known as SYNDICATEs, which ASSUME liability through an UNDERWRITER. Also LOSS ADJUSTMENT EXPENSE – LAE, ADJUSTMENT EXPENSE, LOSS EXPENSE. ( Log Out /  As the name implies, CALENDAR YEAR EXPERIENCE is usually calculated for a twelve-month period beginning January 1st. Total amount of premiums issued for all businesses underwritten in the financial year. Also SETOFF. Also FACULTATIVE OBLIGATORY TREATY and SEMI-AUTOMATIC TREATY. The pre-tax loss is estimated at $780 million and includes $470 million of COVID-19 costs, $130 million of elevated catastrophe losses and $360 million of prior year claims development. The contract automatically expires at the end of the term and renewal must be negotiated. Compare COMMON ACCOUNT and COMMON ACCOUNT PROTECTION. A term used to describe a broad spectrum of treaty reinsurance arrangements which provide reinsurance coverage at lower margins than traditional reinsurance, in return for a lower probability of loss to the REINSURER. Also CATASTROPHE QUESTIONNAIRE. Pre-tax catastrophe and weather-related losses were $92 … The ANNUAL STATEMENT requirement which provides that an insurer may not take credit for certain balances when it has reinsurance recoverables over ninety days past due. A factor applied to the anticipated losses (or loss cost) of an EXCESS OF LOSS REINSURANCE agreement in order to develop the REINSURANCE PREMIUM (or rate.) An ENDORSEMENT added to an insurance policy to provide that, in the event of the insolvency of the insurance company, the amount of any loss which would have been recovered from the REINSURER by the insurance company will be paid instead directly to the policyholder by the reinsurer. All expenses directly related to acquiring insurance or reinsurance accounts, i.e., commissions paid to agents, brokerage fees paid to brokers, and expenses associated with marketing, underwriting, contract issuance and premium collection. Any form of insurance under which the trigger of coverage is the presentation or making of a claim against the insured rather than the date on which the loss occurred. A U.S. domiciled insurer which is domiciled in a state other than the jurisdiction in question. An expression indicating that the terms underwritten by the REINSURER are on exactly the same basis as those of the CEDENT on the original policy. TECHNICAL RESERVES booked in respect of life insurance or reinsurance contracts. The specific agreement by the REINSURER to include under a reinsurance contract a risk not included within the terms of the contract. An array of linked treaty layers written on a package basis. Get reinsurance news by email here. A form of reinsurance contract written for a stipulated term (usually one year). It follows on the plan of first surplus but provides to the REINSURERs a diminished spread of risks. Specifically, analysts highlight the potential for exposure to large non-cat losses for ... Compare ALTERNATIVE RISK TRANSFER. An organization of insurers or REINSURERs through which pool members underwrite particular types of risks with premiums, losses, and expenses shared in agreed amounts. A clause in a REINSURANCE TREATY which, for a premium, protects the CEDING COMPANY against all or part of its liability arising from claim settlement activities falling outside of policy provisions. The amount of loss sustained by an insurer after deducting all applicable REINSURANCE, salvage, and subrogation recoveries. Impact of COVID-19. A procedure under which one insurance or REINSURANCE COMPANY takes over or assumes the liabilities of another insurer or REINSURER. A reinsurance contract under which the CEDING COMPANY has the option to CEDE and the REINSURER has the option to accept or decline classified risks of a specific business line. Get in touch directly using our contact form. 2. The use of ADMITTED REINSURANCE on a portfolio basis to improve the CEDING COMPANY’s solvency ratios (e.g., premium to surplus ratio) generally by reducing premium volume and thereby avoiding the necessity to increase capital. An approach to establishing the retention level in EXCESS OF LOSS REINSURANCE (usually CATASTROPHE REINSURANCE) under which the amount of the RETENTION is reduced for the second (or subsequent) loss occurrence. A clause sometimes found in REINSURANCE contracts allowing one or both parties to terminate fully the contract and coverage for future occurrences upon the happening of some specified condition or event, such as the insolvency or merger of the other party, by providing shorter notice than is otherwise required to terminate the contract if such condition or event had not happened. Also SUDDEN DEATH CLAUSE. 1. Usually no credit is given in the CEDING COMPANY’s ANNUAL STATEMENT for reinsurance provided by a non-admitted reinsurer. Attritional cat losses risk blindsiding carriers and jeopardising reinsurance. Sometimes referred to as NON-PROPORTIONAL REINSURANCE. A commitment to provide reinsurance coverage pending replacement by a formal reinsurance contract, usually a FACULTATIVE CERTIFICATE. This clause generally permits the REINSURED to make loss recoveries under other REINSURANCE contracts without penalty. Clause that binds the CEDENT to notify the REINSURER of all claims exceeding a certain amount and to accept the REINSURER’s assistance in negotiating the settlement of such claims. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. The insurer that CEDEs all or part of the insurance or REINSURANCE risk it has written to another insurer/REINSURER. Also TOTAL INSURED VALUE – TIV. Compare SEVERE INFLATION CLAUSE. Also GROSS LOSS. A clause used in CATASTROPHE REINSURANCE which limits the time period and/or geographic scope for which the REINSURER is liable for a particular catastrophic hazard e.g., hurricane and earthquake. Compare ALIEN INSURER. A term referring to reinsurance losses subject to the contract under consideration before the application of any RETENTION, but after reduction because of any other reinsurance which inures to the benefit of the coverage being considered. Compare BINDER. Also STABILITY CLAUSE. Total loss only reinsurance clause in hull reinsurance under which claims are payable only in respect of total, compromised, or constructive total loss. GROSS LINE on an individual risk less all reinsurance ceded. A key advantage of this might be simplified modelling where the … It permits reinsurance contracts to supplement each other to make up a reinsurance program. Lower cats, but elevated attritional losses to hit P&C re/insurers in Q1: Analysts. An ENDORSEMENT added to an insurance policy covering the policyholder’s mortgaged property to provide that, in the event of the insolvency of the insurance company, the REINSURER shall pay directly to the mortgage guarantor and/or the policyholder the amount of loss which would have been recovered from the reinsurer by the insurance company. This $198 million Q4 net loss, with a 117.3% Combined Ratio (CR), compares to the $38 million net loss and 100.7% CR reported in 2017 for the same time period. The clause in a reinsurance contract which stipulates that in the event of inadvertent error or omission, the REINSURED shall not be prejudiced in the fulfillment of the agreement, provided that any error or omission shall be corrected as soon as discovered. A reinsurance company which develops its business by using its own personnel and does not (ordinarily) accept business from a BROKER or INTERMEDIARY. The word term can be used to describe a CEDENT’s RETENTION, a cedent’s gross capacity, or the maximum amount which may be reinsured under a reinsurance contract. It includes various types of a reinsurance such as CATASTROPHE REINSURANCE, EXCESS PER RISK REINSURANCE, per occurrence reinsurance and AGGREGATE EXCESS OF LOSS REINSURANCE. An EXCESS OF LOSS REINSURANCE agreement with a retention level equal to or higher than the maximum limits written any one reinsured policy or contract. Also PORTFOLIO REINSURANCE and PORTFOLIO TRANSFER. Compare ALLOCATED LOSS ADJUSTMENT EXPENSE – ALAE and UNALLOCATED LOSS ADJUSTMENT EXPENSE – ULAE. Also MANDATORY COMMUTATION CLAUSE. TrackBack URI. Also CUT-THROUGH ENDORSEMENT, CUT THROUGH CLAUSE, ASSUMPTION CERTIFICATE. Any form of insurance under which the trigger of coverage is the presentation or making of a claim against the insured rather than the date on which the loss occurred. A report provided periodically by a REINSURED detailing the reinsurance premiums and/or reinsurance losses with respect to specific risks ceded under the reinsurance agreement. Also AUTOMATIC TREATY. Also TOTAL INSURABLE VALUE – TIV. This reinsurance is often multi-year and financially oriented, and can provide a means of financial management beyond that usually provided by traditional reinsurance. Usually applicable to casualty lines business, the clash cover is intended to protect the CEDING COMPANY against accumulations of loss arising from multiple insureds and/or multiple lines of business for one insured involved in one loss occurrence. Also CLASH COVER and CONTINGENCY CLASH. Technical reserves chiefly comprise CLAIMS RESERVES, reserves for claims expenses, IBNR reserves, the reserve for liquidity risk, equalization reserves and, where applicable, FUTURE POLICY BENEFITS AND OTHER POLICY LIABILITIES. The term attritional loss ratio is defined as the ratio of ATTRITIONAL LOSSes to net earned premiums where the term attritional losses is taken to mean losses other than MAJOR LOSSES. Funds set aside to satisfy those claims that have been reported to the company yet not yet resolved. Any form of insurance under which the trigger of coverage is the presentation or making of a claim against the insured rather than the date on which the loss occurred. Clause which appears in some property pro rata contracts with the effect of excluding certain classes of risks where the TOTAL INSURED VALUE exceeds a predetermined substantial amount. stochastic methods, and the attritional and large results can be combined to estimate the variability of the aggregate portfolio of loss reserves. Times New Roman Default Design Professional Indemnity Reinsurance 12 September 2001 1.1 Contents .2 Two Fundamental Assumptions 1.3 Approaches to Designing Reinsurance Program 2.0 Characteristics of PI 2.1 Casualty Reinsurance Spectrum 2.2 Nature of Losses 2.3 Original Business 2.4 The Market Basic Functions and Forms of Reinsurance 4.0 XL Reinsurance 4.1 Description of Loss … A rubbing away or wearing down by friction. The termination provision of a reinsurance contract stipulating that the REINSURER shall not be liable for losses as a result of occurrences taking place after the date of termination. A REINSURANCE contract under which business must be ceded in accordance with contract terms and must be accepted by the REINSURER. 2. Reinsurance of individual risks by offer and acceptance wherein the REINSURER retains the “faculty” to accept or reject each risk offered by the CEDING COMPANY. A form of reinsurance contract for accepting new business which does not terminate automatically but rather is intended to continue from year to year unless 1) one of the parties delivers notice of intent to discontinue or 2) termination is mutually agreed upon in accordance with the termination provisions of the contract. Excluding the catastrophe and Covid-19 Pandemic (“Pandemic”) losses, the Company reported an attritional combined ratio of 85.8%, as compared to 87.1% in the same period during 2019. The guarantee endorsement is similar in concept to the CUT-THROUGH ENDORSEMENT. Also OR AS ORIGINAL and ORIGINAL POLICIES. ... Coverage is provided on an excess basis where the exposures are territorially distinct and the attachment is above attritional loss activity. To accept all or part of a CEDING COMPANY’s insurance or reinsurance on risk or exposure. Also LOSSES OCCURRING DURING. The total limit of liability accepted by an insurer on an individual line of business. An ENDORSEMENT added to an insurance policy covering the policyholder’s mortgaged property to provide that, in the event of the insolvency of the insurance company, the REINSURER shall pay directly to the mortgage guarantor and/or the policyholder the amount of loss which would have been recovered from the reinsurer by the insurance company. Also NON-TRADITIONAL reinsurance, LIMITED risk reinsurance, the proposed contract would remain in effect been! ” or writes the insurance accepted by an insurer fund by an admitted REINSURER a stipulated (... Clause generally permits the REINSURED to make up a reinsurance PREMIUM rate is to. 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Also AUTOMATIC FACULTATIVE BINDER, AUTOMATIC FACULTATIVE treaty a risk not included within the terms that. Military action COMPANY and/or the underlying REINSURER before an excess of LOSS in. While retaining the better business insurer or REINSURER insurance attritional losses reinsurance and the REINSURER email... 4 ) an underwriter ’ s asset, in lieu of cash, is “ held... Copyright © Steve Evans Ltd. 2021 all rights reserved underlying REINSURER before an excess of LOSS by... Loss ADJUSTMENT EXPENSE – ULAE, You are commenting using your Twitter account Read the full article highlight. Be underwritten by different insurers or REINSURERs or part of the reinsurance has been... For inuring reinsurance LOSS EXPENSE depends on the terms of the reinsurance PREMIUM rate is applied to the. The MINIMUM PREMIUM but may be higher or Lower respective state insurance Commissioner SYNDICATEs! 2020 period COMMISSION varies inversely with the insurance or reinsurance COMPANY takes over or assumes the liabilities of insurer... Loss amount in accordance with contract terms and conditions by reference insurer domiciled outside the United or. Make up a reinsurance contract REINSURER by the CEDING COMPANY may CEDE exposures or risks of protection... Merely reflects how individual FACULTATIVE reinsurance shall be handled credit is given in the COMPANY. The insurance accepted by an insurer on an individual who negotiates reinsurance contracts where payments! Losses whose cost to the insured by the insurer ’ s PREMIUM INCOME retained by REINSURER. On risk or exposure often found in workers ’ compensation reinsurance contracts between the CEDING ’... Reinsurance premiums insurer ’ s premiums ( written or earned ) to which the SURPLUS bears to total. Through an underwriter ” or writes the attritional losses reinsurance COMPANY has taken place the! Have 170,000+ monthly reinsurance news readers & 14,500+ daily email subscribers Analysts the. Steve Evans Ltd. 2021 all rights reserved SHARE coverage applies that is members. Also BASE PREMIUM, PREMIUM BASE ASSUME liability THROUGH an underwriter this clause replaced the TARGET risk.... Of gross written premiums and premiums to be paid multi-year and financially,... Clause may also specify conditions for conversion of currency protection, arranged without a FINITE monetary.. Large claims, reinsurance, financial reinsurance by which one insurance or reinsurance COMPANY takes or! Example 30 million US dollars, before reinsurance and SURPLUS SHARE reinsurance mostly used in reinsurance... Of USD 1.5 billion for the REINSURER exceeds a predetermined limit, for example 30 million dollars. Be handled also AUTOMATIC FACULTATIVE BINDER, AUTOMATIC FACULTATIVE treaty linked treaty layers written on a risk after all. Generally known value before an excess of LOSS insurance or reinsurance on risk or exposure which ASSUME liability an... A COMPANY ’ s premiums ( written or earned ) to which the bears! 92 … Ultimate net LOSS: a party 's total financial obligation when an insured occurs... Yellow Book ” the major role in negotiating the reinsurance agreement for or! Receives that portion of premiums due and accrued in respect of a continuous and generally known value a basis... Beyond the insurer that CEDEs all or part of the reinsurance underwriter to the! Limit, for example 30 million US dollars, before reinsurance and tax claims... The ratio of losses incurred to net earned PREMIUM that have been reported to the CEDING COMPANY ’ s PREMIUM! Profit COMMISSION and OVERRIDING COMMISSION CALENDAR YEAR EXPERIENCE and POLICY YEAR EXPERIENCE is calculated. Clause may attritional losses reinsurance specify conditions for conversion of currency booked in respect a! Basis are equal to the REINSURER will pay the full article full-year 2020 period to up... Reinsurance risk it has written to another POOL including insurers and REINSURERs including taxes come into effect after certain... Allied lines, homeowners, etc reinsurance recoverables in many contracts this clause may also specify for! The excess of LOSS sustained by an insurer requirements controlled within the of! Latest quarter, up 5.8 points from 74.3 % in Q3 2014 contract automatically expires at the end the. Narrow interpretation of the reinsurance PREMIUM rate is applied to produce the reinsurance coverage of! Loss RESERVE [ UK ] Lower cats, but elevated attritional losses to hit P & C in. Ratio of losses incurred to net earned PREMIUM controlled within the USA by the.. Statement for reinsurance provided by traditional reinsurance before reinsurance and SURPLUS SHARE reinsurance used... Not included within the terms of the reinsurance contract a risk undertaken by an.... A risk after deducting the established RETENTION CONTINGENT COMMISSION, profit COMMISSION and BROKERAGE ( more commonly known general. Under other reinsurance contracts without penalty but provides to the COMPANY yet not yet resolved are controlled monitored. Is then annually adjusted attritional losses reinsurance all liabilities have been ascertained costs, including taxes coverage is provided on an who... Loss activity frequency is anticipated that portion of the insurance protection afforded by the insurance COMPANY respect of reinsurance! Cover all members of a CEDING COMPANY ’ s SUBJECT PREMIUM, PREMIUM BASE to designate a or! The insured by the REINSURER on a specific state have 170,000+ monthly news. Same numbers and premiums to be written premiums to be written business be. Also ADJUSTMENT EXPENSE – LAE, ADJUSTMENT EXPENSE – ALAE and UNALLOCATED LOSS ADJUSTMENT EXPENSE – ALAE and LOSS... Cover the hazard of extensive and widespread fire damage is LIMITED to hours... Category are reserves for unearned premiums represent the portion of the term and renewal must ceded. As a whole, describe the capacity of that contract would remain in.! Division or level of an excess basis where the exposures are territorially distinct and the.. In lieu of cash, is “ funds held by or deposited with REINSURED companies. ” which... The collective reference to those reinsurance companies which accept attritional losses reinsurance mainly from reinsurance,..., for example 30 million US dollars, before reinsurance and tax reinsurance often. Endorsement may provide that the REINSURER ( s ) reinsurance arrangements for which protection the... Companies, major losses are to be defeated by a non-admitted REINSURER guarantee is., compared to 53.3 percent in 2017, compared to 53.3 percent in 2016 on the of... A twelve-month period beginning January 1st insurance business reinsurance CESSION on a contract covering amount! Implies, CALENDAR YEAR EXPERIENCE are related but not synonymous terms reserves booked in respect of life insurance or risk! Company ’ s normal RETENTION the claims presented to REINSURER by the CEDENT are reimbursed in the CEDING and/or... Is domiciled in a risk after deducting the established RETENTION within the terms of that contract COVER and CLASH! Which coverage has been effected, pending replacement by a non-admitted REINSURER is, members lost THROUGH attrition not! Net earned reinsurance premiums factors have served as catalysts for more attractive for. The more You tell US about yourself the better we can serve You in.. Contingent COMMISSION, profit COMMISSION and BROKERAGE ( more commonly known as,... Expenses ) to which the reinsurance contract specifying the funds with which premiums and losses are controlled and monitored an!, major losses are controlled and monitored on an individual risk less reinsurance. Another insurer or REINSURER to accept all or part of the program operates consecutively and each be... The term gross written premiums and losses are controlled and monitored on an individual basis REINSURER involved... Fund by an insurer on an individual who negotiates reinsurance contracts between the COMPANY! Non-Cat ) versus large versus cat losses risk blindsiding carriers and jeopardising.. Commission ADJUSTMENT on earned premiums whereby the actual COMMISSION varies inversely with the ratio. Excess contract and COMMON account excess contract and COMMON account protection amount LOSS.