On Page 30 of Chapter 4 of the latest study notes reads
"Risk XL should protect an insurer adequately against losses that affect only one insured risk"
Is the above trying to say for example:
If there is a large claim say £40000 payable to the insured risk which is the insured policy and we there is a £50000 in excess of £4000 then the reinsurer would pay £46000 (£50000-£4000) and the cedant pays £4000.
If we have a total claim £60000 consisting of £23000 and £37000 on different days which relates to the same policy insured then the reinsurer would pay out in total £56000 and the cedant pay out £4000
Thanks
Last edited by a moderator: Oct 19, 2008