Question

What is the importance of past experience to the reinsurer?

a.

It provides an indication of the amount of risk the reinsurer can expect to undertake for various levels of retention

b.

It helps the reinsurer to calculate the rate

c.

It provides an indication of the reinsured's profitability

d.

It helps the reinsurer to identify the exclusions

Posted under IC85 Reinsurance Management

Answer: (a).It provides an indication of the amount of risk the reinsurer can expect to undertake for various levels of retention Explanation:The past experience provides an indication of the amount of risk the reinsurer can expect to undertake for various levels of retention. The reinsured provides information covering a period of years stating his annual premium income and the number and cost of all claims which have exceeded the proposed retention.

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