Question

What is the primary reason insurers accept the sacrifice involved in participating in pools?

a.

To maximize their individual profitability

b.

To maintain control over their portfolios

c.

To achieve a balance between ceded and received profit

d.

To reduce their dependence on foreign reinsurance markets

Posted under IC85 Reinsurance Management

Answer: (c).To achieve a balance between ceded and received profit Explanation:Insurers accept the sacrifice involved in participating in pools to ensure a reasonable balance between the profit ceded and the profit received over a period. This suggests that the goal is to achieve equilibrium between the profitability of their ceded business and the pooled business. Therefore, option c is the correct answer.

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Q. What is the primary reason insurers accept the sacrifice involved in participating in pools?
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