Question

What role does reinsurance play in reducing insurance parameter risk for insurers?

a.

By increasing parameter risk

b.

By ignoring underwriting failures

c.

By sharing parameter risk with reinsurers

d.

By encouraging fraudulent activities

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).By sharing parameter risk with reinsurers Explanation:Reinsurance helps in reducing insurance parameter risk for insurers by sharing the risk associated with incorrect pricing, underwriting failures, fraudulent activities, etc., with reinsurers.

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Q. What role does reinsurance play in reducing insurance parameter risk for insurers?
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