Question

The practice of reciprocal reinsurance trading is more often used in the case of __________ business.

a.

Fire insurance

b.

Life insurance

c.

Aviation insurance

d.

Accident/liability insurance

Answer: (a).Fire insurance Explanation:The practice of reciprocal reinsurance trading is more commonly used in the case of fire insurance. Reciprocal reinsurance involves an arrangement where insurers agree to share risks with each other. Fire insurance, which provides coverage for damages and losses caused by fire, often involves a higher frequency of claims compared to other lines of business. To manage this risk effectively, insurers may engage in reciprocal reinsurance trading, allowing them to spread the risk and share the burden of fire-related claims with other insurers.

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Q. The practice of reciprocal reinsurance trading is more often used in the case of __________ business.

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