Question

Why is intimate knowledge of markets and classes of business essential for transacting inward reinsurance business?

a.

To increase claim payments

b.

To exclude acceptances in adverse markets

c.

To expand the volume of business

d.

To attract business with quality

Answer: (b).To exclude acceptances in adverse markets Explanation:Intimate knowledge of markets and classes of business is essential for transacting inward reinsurance business. This knowledge allows the insurer or reinsurer to restrict or exclude acceptances in adverse markets, such as those with extremely adverse results like U.S. liability or professional indemnity.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. Why is intimate knowledge of markets and classes of business essential for transacting inward reinsurance business?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What has changed in the composition of reinsurance capacity in recent years?

Q. Why should an insurer or reinsurer plan to write a reasonably large line when transacting inward reinsurance business?

Q. What percentage of global reinsurers rely on retrocessional protection?

Q. What is the purpose of retrocession in the risk management process of reinsurers?

Q. How does credit rating assist in determining the quality of retrocession offers?

Q. What is the role of a management information system in writing inward reinsurance?

Q. How can accumulation risks arising from inward reinsurance business be controlled?

Q. What are the two options available to an insurer or reinsurer accepting reinsurance business?

Q. Why might an insurer or reinsurer starting to write reinsurance business initially choose to write only net lines?

Q. What is the purpose of a retrocession treaty?

Q. Why might selling a retrocession treaty placed abroad be challenging?

Q. What is the relationship between over-riding commission and administrative cost in a retrocession arrangement?

Q. Which type of reinsurance business involves more administrative work?

Q. In which type of reinsurance business is premium volume built up faster?

Q. What distinguishes proportional reinsurance from non-proportional reinsurance?

Q. What advantage does non-proportional reinsurance offer to the reinsurer?

Q. What type of reinsurance involves accumulations under various treaties?

Q. Which factor is important to consider when determining the territorial scope of reinsurance business?

Q. Which markets may an insurer or reinsurer wish to avoid for political or economic reasons?

Q. Why might a new entrant in the reinsurance business start with domestic business?

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!