Question

Which of the following is correct with respect to per risk retention?

a.

Per Risk retention can be managed through controlled and informed decisions.

b.

The Per Risk retention is managed only through reasonable estimation of financial consequences.

c.

The Per Risk retention relates to the number of individual risks that could be hit by multiple events.

d.

The per risk retention is managed by allowing a catastrophe reserve for funds to accumulate and be available over the long term.

Posted under IC85 Reinsurance Management

Answer: (a).Per Risk retention can be managed through controlled and informed decisions. Explanation:Per Risk retention is the method used to determine the amount of risk that an insurer is willing to retain for a single policy or contract. The amount of retention may vary depending on the type of risk involved, and the insurer's overall risk appetite. However, the amount of retention can be managed through controlled and informed decisions, which include underwriting guidelines, risk assessment, and pricing strategies. By managing the Per Risk retention, insurers can effectively balance their risk exposure and profitability, while ensuring that they have sufficient resources to cover potential losses.

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Q. Which of the following is correct with respect to per risk retention?
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