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SP2 Reinsurance for Products

A

AaronD

Member
Hey,

Would there be a list of reinsurance types that can be used for certain products / certain scenarios?

e.g. A company with low free asset - FinRe

An exhaustive list would be handy to refer to!

Thanks,
Aaron
 
Hi Aaron

Here are some thoughts on the link between type of reinsurance and scenario.

Low free assets - yes FinRe (also any type of reinsurance protects the insurer from losses draining the last of their free assets)

Risk premium - any type of contract, but particularly useful when reserves are significant and the sum at risk method is used

Original terms - works well for term assurance. Difficult to use for with-profits and unit-linked as the reinsurer has to follow the insurer's investment/bonus strategy as the reinsurer pays the maturity/surrender claims too.

Surplus - useful when policies vary by size and insurer is more worried about large claims

Quota share - covers all claims, so useful if there are many claims, eg parameter error, mispricing. Links well with reinsurer providing expertise as reinsurer gets some of all the business.

Catastrophe XL - useful for group protection business

Aggregate XL - protects the entire portfolio from claims whether it's many smaller ones or a few larger ones.

Individual XL - basically identically to individual surplus.

Best wishes

Mark
 
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