Question

Why do ceding insurers value reciprocal reinsurance trading?

a.

To protect the treaty portfolio from hazardous risks

b.

To balance the treaty exchanges and maintain stability in underwriting surplus

c.

To increase net premiums and net profits

d.

To obtain the best possible terms for their business

Answer: (b).To balance the treaty exchanges and maintain stability in underwriting surplus Explanation:Ceding insurers value reciprocal reinsurance trading because it helps balance the treaty exchanges and ensures greater stability in underwriting surplus.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. Why do ceding insurers value reciprocal reinsurance trading?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What are the benefits derived from a reciprocal exchange of treaties?

Q. Which type of insurers are able to exchange business against their first surplus property treaty?

Q. In which lines of business is reciprocal reinsurance trading widely prevalent?

Q. In which lines of business is reciprocal reinsurance trading widely prevalent?How does premium reciprocity vary based on profitability in reciprocal reinsurance trading?

Q. What is a potential danger in accepting a large premium reciprocity from a treaty with low average profitability?

Q. What are the advantages of larger premium reciprocity for the ceding insurer?

Q. What should be done to bring down the net profit ceded when accepting a large premium reciprocity?

Q. What impact should be considered when examining the terms of a treaty exchange through an intermediary?

Q. What can be concluded about the relationship between profitability and premium reciprocity in reciprocal reinsurance trading?

Q. What is the purpose of splitting the surplus treaty into two or three surpluses?

Q. What information do reinsurers typically want to know about rate levels and claims?

Q. In the placement of the second surplus treaty, what should be aimed for?

Q. What is the importance of the reinsurer's general business approach in the placement of higher covers?

Q. When might reinsurers agree to waive bordereaux for Auto/Fac covers?

Q. Which of the following treaty is used mainly for small accounts where the extra administrative burden of a surplus can be quite large?

Q. Which of the following measures is important for improving the national underwriting capacity and retentions?

Q. What is the primary purpose of participating in pools and ceding on an obligatory basis to national reinsurance organizations?

Q. Which entity is typically the recipient of obligatory cessions in several countries?

Q. How does participation in pools and exchange of reinsurance business benefit smaller insurers in specialized classes of business?

Q. What is one of the challenges faced by insurers when participating in pooling arrangements?

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!