Question

What is the main advantage of facultative reinsurance?

a.

Lower administrative costs

b.

Flexibility to reinsure hazardous risks not protected by treaty arrangements

c.

Greater capacity to reinsure multiple risks

d.

Provides coverage for all policies of an insurer

Posted under IC85 Reinsurance Management

Answer: (b).Flexibility to reinsure hazardous risks not protected by treaty arrangements Explanation:The main advantage of facultative reinsurance is its flexibility, which has resulted in its strategic and widespread use to reinsure hazardous risks not protected by treaty arrangements.

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Q. What is the main advantage of facultative reinsurance?
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