Question

Why might an insurer consider reinsuring as much as possible during times when the supply of reinsurance exceeds demand?

a.

They can reinsure at terms which are so advantageous to them

b.

They want to provoke reinsurers to require higher retentions

c.

They want to maintain an acceptable degree of fluctuation of results

d.

They want to earn higher return on their investment portfolio

Posted under IC85 Reinsurance Management

Answer: (a).They can reinsure at terms which are so advantageous to them Explanation:During times when the supply of reinsurance exceeds demand, an insurer may be able to reinsure at terms which are so advantageous to them that they may consider it a shrewd financial move to reinsure as much as possible.

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Q. Why might an insurer consider reinsuring as much as possible during times when the supply of reinsurance exceeds demand?
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