Question

What is the main intention behind the calculation of a suitable rate for a reinsurer?

a.

To cover the normal claims expected to occur

b.

To reserve for worsening experience- including inflation and I.B.N.R. claims

c.

To cover the reinsurer's management expenses

d.

All of the above

Posted under IC85 Reinsurance Management

Answer: (d).All of the above Explanation:The main intention behind the calculation of a suitable rate for a reinsurer is to cover the normal claims expected to occur, reserve for worsening experience- including inflation and I.B.N.R. claims, cover the reinsurer's management expenses, and provide surplus that may be termed a profit.

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