Reinsurance. The Nuts and Bolts 3rd Ed

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Published Date

May 2012


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Reinsurance. The Nuts and Bolts 3rd Ed

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Now in it's third edition this essential guide to reinsurance, ' Reinsurance: The Nuts and Bolts' has been completely re-written and updated. Many of the practices contained within the publication have been brought up to date to reflect todays standards with the inclusion of some additional subjects at the request of colleagues and readers.

 

 

PUBLISHED DATE: MAY 2012
No. OF PAGES: 269

 

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It has been almost 12 years since the last revision of this title and a great deal has happened in the London market in that period. Regulation of both banking and insurance is now under the control of the Financial Services Authority and this has led to tighter controls over how insurance institutions in the UK conduct their business. In tandem with these changes, the London market has reformed itself considerably and the three organisations that formerly handled many back-office functions on behalf of their members, LPSO (Lloyd’s), LIRMA (London Non-Marine market) and ILU (London Marine market) have been brought together under the umbrella of XChanging-Insure Services. This has led to the introduction of the Market Reform Contract; a document that replaces the traditional broker’s slip with a standard form of contract, designed to incorporate the entire terms and thereby provide contract-certainty at the inception of the insurance or reinsurance. This has had an enormous impact on the working practices of reinsurance brokers. The traditional slip that could, in the past have been just a few pages, is now a full contract including the contract wording (a document that was previously signed after the contract came into force; sometimes, in fact, so long after inception that it may already have expired before it was signed!).

 

Reinsurance: The Nuts and Bolts is a must have for all professionals working, studying or with a general interest in Reinsurance.




Introduction

Introduction to the second edition

Introduction to the first edition

Chapter 1. What is Reinsurance, and why do we need it?

Chapter 2. Types of Reinsurance

Facultative

Pro-rata (or proportional)

Excess of Loss (non-proportional)

Treaties

Pro-rata Treaties

Quota Share Treaties

Surplus Treaties

Facultative Obligatory Covers

Cessions to treaties

Special considerations

Basis of cession

Top Location & Pro-rata Basis

PML Basis

Per policy basis

Per Bottom Basis

Per Vessel Basis

Per Person Basis

Practical Exercise 1 - Distribution of Premiums and claims over a proportional programme

Chapter 3. Treaty Reinsurance - Financial Aspects

Premiums

Commission

Tax

Premium Reserves

Loss Reserves

Interest on Reserves

How Reserves are accounted

Losses

Cash Loss Refunds

Premium and Loss Portfolio Transfers

Clean-cut versus Underwriting Year basis

Clean-Cut basis

Calculation of unexpired premiums

The 1/24ths System

1/8ths System

A fixed percentage

Profit Commission

Practical Exercises 2 (a) and (b)- Profit Commission calculations

Deficit Carry Forward

Underwriting Year Basis

Chapter 4. Proportional Treaty Wordings and Clauses

Period and Termination

Special Termination and Reinsurer Downgrade

Errors and Omissions

Self Insured Obligations

Inspection of Records

Arbitration

Bordereaux

Chapter 5. Designing a Property Reinsurance Programme from historical data

Data

Apportionment over the treaty programme.

Constructing the Spreadsheet

Chapter 6. Excess of Loss Covers

Chapter 7. Excess of Loss Reinsurance - Financial Aspects

Premium

Rate

Premium Income

(Minimum and) Deposit Premium

The "Penal" M & D

Other variable factors

Loss Payments

"Hours Clause"

Practical Exercise 3 - Allocating Claims over an excess of loss programme

Reinstatement Premiums

Burning Cost Rating

Working Covers

Definition of Burning Cost

Burning Cost Spreadsheet Model

Chapter 8. Excess of Loss Rating

Exposure Rating

Constructing the Property Risk Excess Rating Model

Catastrophe Rating

Constructing a Catastrophe Rating Model

Chapter 9. Market Evolution

Chapter 10. Miscellaneous

Retrocession Treaties

Reinstatement Premium Protections

Additional Reinstatement Covers

“Alternative Reinsurance”

Thinking things through

“Graded Retentions make better treaties”

“Quota Share bad, Surplus good”

The Market Reform Contract (MRC)

Chapter 11. Over to you

Chapter 12. Appendices

Appendix 1 - Answers to Practical Exercise # 1

Appendix 2 - Answers to Practical Exercise # 2

Appendix 3 - Answers to Practical Exercise # 3

Appendix 4 - Specimen Scale of Property First Loss Rates

Appendix 5 - Specimen Treaty Wordings

Non Marine Surplus Treaty

Motor and General Liability Excess of Loss

Marine Cargo and Hull Excess of Loss

General Catastrophe Excess of Loss

Title: Reinsurance. The Nuts and Bolts 3rd Ed
Edition: Third
Number of Pages: 269
Product Code: WS1066K
ISBN: ISBN 13: 978-1-85609-536-5 (9781856095365), ISBN 10: 1-85609-536-3 (1856095363)
Published Date: May 2012
Binding Format: Paperback
Book Height: 235 mm
Book Width: 155 mm
Book Spine: 14 mm
Weight: 0.40 kg

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