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Example: Apex Fire Insurance wants protection for all windstorm losses in excess of $1 million. Assume Apex enters into an excess-of-loss arrangement with Franklin
Example: Apex Fire Insurance wants protection for all windstorm losses in excess of $1 million. Assume Apex enters into an excess-of-loss arrangement with Franklin Re to cover single occurrences during a specified time period. Franklin Re agrees to pay all losses exceeding $1 million but only to a maximum of $10 million. If a $5 million hurricane loss occurs, Franklin Re would pay $4 million.
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