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American Re: first surplus that takes up to 3 lines of insurance General Re: second surplus that takes up to 2 lines of insurance Swiss

American Re: first surplus that takes up to 3 lines of insurance

General Re: second surplus that takes up to 2 lines of insurance

Swiss Re: third surplus that takes up to 2 lines of insurance

a) What is the capacity (maximum amount of insurance coverage) that Travelers can write on a single policy?

b) A homeowners policy is written by Travelers for $500,000 of coverage on a home in Nevada. A subsequent loss occurs for $240,000. How much will Travelers, American Re, General Re, Swiss Re pay respectively?

c) Following (b) above, suppose Travelers Insurance switched the current treaty to an excess-of-loss treaty with all three reinsurers, with the retention limit remaining the same ($100,000). Under this scenario, how much will Travelers, American Re, General Re, Swiss Re pay respectively?

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