Question

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

a.

To increase earnings

b.

To stabilize premiums

c.

To reduce financial problems

d.

To cede a portion of risk

Answer: (d).To cede a portion of risk Explanation:Retrocession is an essential tool in the risk management process of reinsurers. It is used to cede a portion of their risk and stabilize their earnings.

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

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