Question

What is the purpose of catastrophe reinsurance?

a.

To cap the portfolio's loss for a given time period

b.

To pay for losses exceeding a predetermined threshold

c.

To pay for losses from catastrophic events defined in the contract

d.

To pay aggregate net loss over a predetermined retention for a portfolio

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).To pay for losses from catastrophic events defined in the contract Explanation:Catastrophe reinsurance pays for losses from catastrophic events defined in the contract, such as a minimum number of deaths occurring within a specified time period.

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Q. What is the purpose of catastrophe reinsurance?
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