1. Glossary definition of Clash Cover: Excess of loss cover for liability business, limiting insurers' exposure to the risk that one event gives rise to claims on more than one policy. Glossary definition of Agg XL: Form on excess of loss reinsurance that covers the aggregate of losses, above an excess point and subject to an upper limit over a defined period, usually one year. This can be an aggregation of losses from a single insured event, or a defined peril (or perils). Examples of Agg XL given in course notes: By event: Motorway pile up. By peril: latent claims eg. asbestos related claim. Clash Cover and Agg XL sound very similar. What's the difference, if any? 2. QS can be in both Facultative and Treaty forms. Facultative - covers single risk. Treaty - covers group of similar risks. Could I get an example to demonstrate this difference please?
Hi PBhella, Q1 Yes they're similar. Note though that the definition for clash cover specifically mentions liability cover. Q2 Surplus RI covers a different percentage of every risk (ie a different percentage of every underlying policy). This means there must be more than one policy covered. That's why we call it a 'surplus treaty'. A QS could cover a single underlying policy, eg a single EL policy, say. This would make it a facultative QS. Alternatively, QS could cover a group of policies, eg a whole portfolio of motor insurance policies. This would make it a QS treaty. Best wishes, Katherine.
