Question

What determines the amount of reinsurance business that can be transacted?

a.

The volume of direct business available

b.

The number of reinsurers in the market

c.

The profitability of the insurance industry

d.

The type of risks being underwritten by the insurer

Posted under IC85 Reinsurance Management

Answer: (a).The volume of direct business available Explanation:The volume of reinsurance business that can be transacted depends primarily upon the volume of direct business available at any given time. Insurers only seek reinsurance when they have exceeded their capacity to handle risks on their own.

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