Question
Kindly answer the following questions with which type of reinsurance should be used in each company. And explain the type and why it is suitable
Kindly answer the following questions with which type of reinsurance should be used in each company. And explain the type and why it is suitable for each company.
Reinsurance can be used by an insurer to solve several problem. Assume you are an insurance consultant who is asked to give recommendations concerning the type of reinsurance plan or arrangement to use.
For each of the following situation, indicate the type of reinsurance plan or arrangement that the ceding insurer should use, and explain the reasons for your answer.
a. Company A is an established insurer and is primarily interested in having protection against a catastrophic loss arising out of a single occurrence.
b. Company B is a rapidly growing new company and desires a plan of reinsurance that will reduce the drain on its surplus because of the expense of writing a large volume of new business.
c. Company C has received an application to write a $ 50 million life insurance policy on the life of the chief executive officer of a major corporation. Before the policy is issued, the underwriter wants to make certain that adequate reinsurance is available.
d. Company D would like to increase its underwriting capacity to write new business.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started