Question

Why do ceding insurers protect the experience of their outward treaties in reciprocal trading?

a.

To increase the treaty capacity for hazardous risks

b.

To maintain a balanced exchange of treaties

c.

To maximize their net premiums and net profits

d.

To secure excess of loss cover for the treaty portfolio

Answer: (c).To maximize their net premiums and net profits Explanation:Ceding insurers value their outward treaties and protect their experience by measures such as not utilizing the full treaty capacity for more hazardous risks. This protection is aimed at maximizing their net premiums and net profits.

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Q. Why do ceding insurers protect the experience of their outward treaties in reciprocal trading?

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