Question

How does the range of insurance business covered affect the rate for excess of loss covers?

a.

Where a treaty covers a number of classes of business or where there is only little exclusion the risk assumed by the reinsurer would be greater.

b.

Where a treaty covers only one class of business or where there are many exclusions, the risk assumed by the reinsurer would be greater.

c.

The range of insurance business covered does not affect the rate for excess of loss covers.

d.

None of the above.

Posted under IC85 Reinsurance Management

Answer: (a).Where a treaty covers a number of classes of business or where there is only little exclusion the risk assumed by the reinsurer would be greater. Explanation:Where a treaty covers a number of classes of business or where there is only little exclusion, the risk assumed by the reinsurer would be greater, and this affects the rate for excess of loss covers.

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