P
pnheera
Member
What is the difference between excess of loss reinsurance and individual surplus reinsurance.
The reinsured amount under both seems to be the excess of the benefit/claim over a predetermined retention limit.
For excess of loss the definition states that the reinsurer pays any loss on an individual risk in excess of a predetermined retention.
What is meant by individual risk? Could this be the different types of contracts offered by the insurer, for example endowment assurances would be one risk, term assurances another, and whole life contracts another individual risk.
So if the Insurer has a retention limit of say 1million on the endowment assurances risk and claims from several endowment assurances policies came in, amounting to 5million, then the reinsurer would pay 4million. Would this be the case, is my understanding sound.
The reinsured amount under both seems to be the excess of the benefit/claim over a predetermined retention limit.
For excess of loss the definition states that the reinsurer pays any loss on an individual risk in excess of a predetermined retention.
What is meant by individual risk? Could this be the different types of contracts offered by the insurer, for example endowment assurances would be one risk, term assurances another, and whole life contracts another individual risk.
So if the Insurer has a retention limit of say 1million on the endowment assurances risk and claims from several endowment assurances policies came in, amounting to 5million, then the reinsurer would pay 4million. Would this be the case, is my understanding sound.