Finance and Treasury

Reinsurance Principles and Treaty Programme Design

Reinsurance is bought to protect capital, and a programme designed around last year's losses frequently leaves the insurer exposed to the event that actually threatens it. This course covers designing for the exposure. Delegates work through why an insurer cedes risk at all, and the difference between protecting a single large loss and protecting an accumulation. Proportional arrangements are covered, quota share and surplus, including commission and profit commission. Non proportional arrangements follow: excess of loss per risk, per event and stop loss, with retention and limit selection. Catastrophe exposure modelling is addressed at the level a cedant needs to challenge a broker's output. Programme structure across layers and the reinstatement provisions that decide cover after a first event are covered. Reinsurer security, credit risk and the recovery that fails follow. Facultative placement is addressed. The course closes on accounting for reinsurance, on claims recovery and on renewal negotiation.