Prudential Insurance is a property insurer that transacted a surplus-share reinsurance treaty with Lovelysafe Re. Prudential has a retention limit of P200,000 on any single building, and up to nine lines of insurance may be ceded to Lovelysafe Re. A building valued at P1,600,000 is insured with Prudential. Shortly after the policy was issued, a severe storm caused a P800,000 loss to the building.

Show the computation.

c. What is the maximum amount of insurance that Prudential can write on a single building under the reinsurance agreement? Explain your answer.