Question

What is the technical objective of a reinsurance program?

a.

To stabilize the technical results of the insurer / reinsurer by reducing fluctuations in claims to the yearly retained account

b.

To increase the concentration of risks in any one class of business or geographical area

c.

To minimize the risk of suffering a greater liability than justified by the financial resources in the event of a catastrophe

d.

To reduce the probability of ruin at a price acceptable to the company

Answer: (a).To stabilize the technical results of the insurer / reinsurer by reducing fluctuations in claims to the yearly retained account Explanation:The technical objective of a reinsurance program is to stabilize the technical results of the insurer / reinsurer by reducing fluctuations in claims to the yearly retained account.

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Q. What is the technical objective of a reinsurance program?

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