Presentation1

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Presentation1

  1. 1. REINSURANCE
  2. 2. What is “reinsurance?” • Insurance of insurance • Contracts under which one company (“reinsurer”) agrees to indemnify an insurance company (“cedent”) against liabilities arising from insurance policies that it issued to policy holders
  3. 3. What is “insurance?” • An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.” Ambrose Bierce, The Devil’s Dictionary. • Reinsurance could be characterized as: “The means by which the man who keeps the table hedges his bets.”
  4. 4. Why reinsure? • Many reasons, including: 1. Risk Transfer/Spreading 2. Reserves and Surplus Relief 3. Fronting arrangements -- reinsurer bears all or almost all of the ultimate risk and may handle the insurance underwriting and claims.
  5. 5. Basic Terminology • Cedent/Reinsured • Reinsurer • Retrocessionaire • Cessions/Billings
  6. 6. Types of Reinsurance Facultative v. Treaty Reinsurance Think about doughnuts QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture.
  7. 7. Facultative: Reinsuring A Specific Policy
  8. 8. The Donut Company

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