Question

For which of the following reasons does ‘direct writing insurance companies’ start to write inward reinsurance business?

a.

To increase payment of claim amount

b.

To achieve a lower income ratio by the maintenance of the volume of premium income

c.

To obtain a better and wide spread of business by writing business from overseas

d.

To spend investment income, which is derived from cash flow resulting from inward acceptances

Posted under IC85 Reinsurance Management

Answer: (c).To obtain a better and wide spread of business by writing business from overseas Explanation:Direct writing insurance companies may write inward reinsurance business for the reason of obtaining a better and wide spread of business by writing business from overseas. This allows them to diversify their acceptances across markets and minimize the impact of claim fluctuations.

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Q. For which of the following reasons does ‘direct writing insurance companies’ start to write inward reinsurance business?
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