Question

How does the lower retention of the reinsured affect the rate?

a.

It decreases the rate

b.

It increases the rate

c.

It does not affect the rate

d.

It is impossible to say

Posted under IC85 Reinsurance Management

Answer: (b).It increases the rate Explanation:The lower the retention of the reinsured the larger the number of claims the reinsurer can expect to exceed it, therefore the higher will be the rate.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How does the lower retention of the reinsured affect the rate?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. How does the range of insurance business covered affect the rate?

View solution

Q. What is the importance of past experience to the reinsurer?

View solution

Q. What is Burning Cost?

View solution

Q. What is Burning Cost?What are Incurred But Not Reported (I.B.N.R.) claims?

View solution

Q. What is the basis used for all types of excess of loss treaties?

View solution

Q. What is the meaning of Rate on Line?

View solution

Q. Why are catastrophe covers unsuitable for the burning cost method of rating?

View solution

Q. What does the Rate on Line indicate?

View solution

Q. What is an Incurred But Not Reported (I.B.N.R.) claim?

View solution

Q. What are the main factors in rating a catastrophe cover?

View solution

Q. What is the burning cost method of rating?

View solution

Q. How is the rate of premium agreed upon in the burning cost method?

View solution

Q. What is the payback method used for?

View solution

Q. What is the Rate on Line used for?

View solution

Q. What are the main factors in rating a catastrophe cover?

View solution

Q. What is the payback method in catastrophe modeling?

View solution

Q. What is the basis for rating working excess of loss treaty?

View solution

Q. What is the formula for calculating pure burning cost?

View solution

Q. What are the main factors in rating a catastrophe cover?

View solution

Q. What is the payback method used for?

View solution
View All MCQs on IC85 Reinsurance Management

Recommended Subjects

Are you eager to expand your knowledge beyond IC85 Reinsurance Management? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Environment Management

Master the art of Environment Management with our specialized category. Explore...

Marketing and Marketing Management

Uncover the strategies and tactics of marketing with our Marketing and Marketing...

Virology

Explore the captivating world of Virology with our specialized category. Dive into...

Avionics Engineering

Soar into the world of aviation technology with our Avionics Engineering category....

Biology

Dive into the realm of life sciences with our Biology category. Explore the wonders...

IC 14 Regulations of Insurance Business

Prepare for the IC 14 Regulations of Insurance Business exam with our focused set of...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Mass Transfer

Delve into the science of Mass Transfer with our specialized category. Explore...