Question

What costs are included in the calculation of ultimate net loss in non-proportional reinsurance?

a.

Survey reports, assessor’s fees, salvage costs, legal costs, interest, etc.

b.

Salaries of employees and office costs of the insurer

c.

Claims paid by the insurer

d.

Recoveries from proportional reinsurers, salvage, subrogation and contribution

Posted under IC85 Reinsurance Management

Answer: (a).Survey reports, assessor’s fees, salvage costs, legal costs, interest, etc. Explanation:The amount of the ultimate net loss consists not only of all sums paid in respect of the claim but also all expenditure incurred by the insurer in connection with the claim, such as survey reports, assessor’s fees, salvage costs, legal costs, interest, etc.

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Q. What costs are included in the calculation of ultimate net loss in non-proportional reinsurance?
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