Question

What is "Retention" in the context of reinsurance?

a.

Reinsurance that transfers all insurance liability to the reinsurer

b.

Reinsurance that covers only a portion of the ceding insurer's losses

c.

The process of reinstating a reinsurance limit after payment of a loss

d.

The amount of insurance liability or loss that an insurer assumes for its own account

Posted under IC85 Reinsurance Management

Answer: (d).The amount of insurance liability or loss that an insurer assumes for its own account Explanation:"Retention" can be defined as the amount of insurance liability or loss that an insurer assumes (or retains) for its own account. It can refer to the insurer's portion of liability in pro rata reinsurance or the insurer's portion of loss in excess of loss reinsurance.

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Q. What is "Retention" in the context of reinsurance?
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