Ch 28: Reinsurance Flashcards
1
Q
Reasons for using reinsurance
A
- Limitation of exposure to risk
- Avoidance of single large losses
- Smoothing of results
- Availability of expertise
- Increasing capacity to accept risk
- Financial assistance
2
Q
Factors that influence insurer’s appetite for reinsurance
A
- Size of the insurer
- Experience of the insurer
- Available free assets
- Size of its portfolio
- Degree to which it is felt that the business outcome is predictable within bounds
