0
A reinsurance broker acts as an intermediary between insurance companies seeking to transfer risk and reinsurers who provide that coverage, facilitating negotiations and placements. In contrast, a reinsurer is a company that assumes the risk from insurers, providing them with financial protection against large claims. While brokers focus on finding the best terms and conditions for their clients, reinsurers evaluate and accept the risk to build their own portfolios. Thus, their roles in the reinsurance market are distinct yet complementary.
What else can I help you with?
What is a reinsurance credit?
Reinsurance credit refers to the financial benefit that an insurance company can recognize on its balance sheet from reinsurance arrangements. When an insurer cedes some of its risk to a reinsurer, it can count on the reinsurer's financial strength to support its liabilities. This credit helps insurers manage their capital requirements and improve their solvency ratios, as it reflects the potential recovery from the reinsurer in the event of claims. However, the credit is contingent upon the reinsurer's ability to fulfill its obligations.
Can a broker be both a broker and reinsurance broker?
Are you pertaining to being both a direct insurance and reinsurance broker at the same time? It probably depends on the Insurance Laws in your country. In the Philippines, you can be both a direct insurance and reinsurance broker. There's just a higher paid-up capital required for the composite license.
What is portfolio transfer in reinsurance?
Portfolio transfer in reinsurance refers to the process where an insurer transfers a block of its insurance policies, along with the associated risks and liabilities, to a reinsurer. This can be done to reduce risk exposure, improve capital management, or enhance solvency ratios. The reinsurer assumes the responsibilities for claims and premiums related to the transferred portfolio, allowing the original insurer to focus on its core business operations. Portfolio transfers can be executed through various methods, including quota share agreements or excess of loss arrangements.
What are the reasons for government intervention in reinsurance?
The government regulates reinsurance for the same reasons it regulates most insurance: to protect consumers. Government itself can become a reinsurer where the potential for large losses (while unlikely) is too great for an insurer to reasonably risk. The reinsurance by a government entity does not spread local risks throughout the insurance markets, as does private reinsurance. A good example is the US Flood Insurance offered in many areas. This fills the gap between private insurance and the actual risk faced from catastrophic flooding.
Does gwp gross written premiums include taxes?
Gross Written Premium includes commissions (to broker/agents) and reinsurance. But it excludes insurance premium tax.
Facultative reinsurance and coinsurance?
Facultative reinsurance is a form of reinsurance in which the terms, conditions, and reinsurance premium is individually negotiated between the insurer and the reinsurer. There is no obligation on the reinsurer to accept the risk or on the insurer to reinsure it if it is not considered necessary. The main differences between facultative reinsurance and coinsurance is that the policyholder has no indication that reinsurance has been arranged. In coinsurance, the coinsurers and the proportion of the risk they are covering are shown on the policy schedule. Also, coinsurance involves the splitting of the premium charged to the policyholder between the coinsurers, whereas the reinsurers charge entirely separate reinsurance premiums. Regards, Tamer Haddadin
Who are the buyers of reinsurance?
*Direct insurance company *Captive insurance company *Reinsurer However, there are no clear separation between buyers and sellers in reinsurance. Insurance company maybe a buyer (outward reinsurance) and a seller (inward reinsurance)
Name of the reinsurance companies in India?
General Insurance corporation of India, ( GIC Re) a company fully owned by Government of India and set up under an Act of Parliament in 1972 is the National reinsurer. No other reinsurer has obtained a license from Indian regulator to do reinsurance business in India. Overseas reinsurers either operate through their representative offices or through reinsurance intermediaries.
Can a broker be both a broker and reinsurance broker?
Are you pertaining to being both a direct insurance and reinsurance broker at the same time? It probably depends on the Insurance Laws in your country. In the Philippines, you can be both a direct insurance and reinsurance broker. There's just a higher paid-up capital required for the composite license.
What are the advantages of quota share reinsurance?
there is no selection against reinsurer since he get a mix of both good and bad business ,hence the reinsurer will attain a balanced port folio with and predictable results .consequently low costsimple to administer
What is the difference between facultative and treaty reinsurance?
With Facilitative Reinsurance, individual risks are offered by a ceding insurer for acceptance or rejection by the reinsurer. With Treaty Reinsurance, the reinsurer and ceding (or offering) insurer have agreed that a specified portion of the type or category of risk as specified in the reinsurance treaty will be ceded (or offered) by the insurer and accepted by the reinsurer. Fac covers an individual risk, treaty covers a group of risks.
What factors are considered by insurance companies when choosing a reinsurance program?
Generally speaking, the following factors are considered important among insurers when considering potential reinsurance partners; (i) the financial security/solvency of the reinsurer, (ii) the third-party rating of the reinsurer, (iii) the reinsurer's reputation and history of willingness to pay claims in a complete and timely fashion, (iv) the reinsurer's reputation and history of willingness to resolve disputes in a fair, timely and cost-efficient manner, (v) the price (as measured in Rate-On-Line) of the reinsurance product, (vi) the breadth and potential cost of items excluded from coverage, (vii) the reinsurer's willingness to develop bespoke solutions for its client's risk management needs. This is not meant to be an exhaustive list, and other factors may be considered as well.
What is meant by quota share treaty reinsurance?
Quota Share reinsurance is a type of pro rata reinsurance in which the primary insurer and the reinsurer share the amounts of insurance, policy premiums and losses (including loss adjustment expenses) using a fixed percentage. Quota Share reinsurance can be used for both property and liability insurance but is more frequently used in property insurance.
What is reinsurance broker?
No such profession. There are only insurance brokers. These will handle renewal of insurance.
How does the deductible work in excess of loss reinsurance?
In excess of loss reinsurance, the deductible represents the amount that the primary insurer must pay out of pocket before the reinsurer becomes liable for any losses. This deductible is typically set at a specific dollar amount or a percentage of the loss and is designed to protect the reinsurer from minor claims. Once losses exceed this deductible, the reinsurer covers the excess up to a predetermined limit, providing financial protection to the insurer against large claims. This structure helps manage risk and ensures that the primary insurer retains some exposure.
What is a reinsurance scheme?
Reinsurance schemes are somewhat similar to reinsurance commutations, where the cedant assumes back the outstanding liabilities on a reinsured block of business a few years after the exposure period has closed. In a scheme, however, rather than the cedant and the reinsurer negotiating a commutation price, an independent court is used to determine the cost of the liabilities that are being assumed back.
Can you explain reinsurance for short term insurance?
Regardless of the type of insurance involved (long or short term), the essence of reinsurance is essentially the same. It can be characterized as "insurance for an insurer". It is a contract that one insurer makes with another to protect the first from a risk that it has already assumed. In retun the first (primary) insurer pays a premium to the reinsurer to assume that risk. Stated otherwise, a reinsurance contract os one in which the reinsurer agrees to indemnify (make whole), either fully or in part, losses that it has to pay to policyholders. Those losses are paid under the original insurance contracts issued to consumers. State insurance regulators limit the amount of insurance that an insurer can issue based, in part, upon the insurer's assets. Asset value is important to ensure that the insurer's financial stability is sufficient to pay policyholder claims as they accrue. One of the functions of certain types of reinsurance is that it counts toward the assets of the primary insurer. Therefore, since it is considered to have additional assets consisting of the reinsurance, the primary insurer is able to issue a greater amount of insurance than it would if it has to rely solely upon its own assets. Important to note is that for the most part, the reinsurance transaction is invisible to the insurance consumer. As such, the consumer does not have a direct right of action (claim or lawsuit) against the reinsurer; the claim is against the insurer and the insurer and reinsurer allocate responsibility between themselves. However, in rare circumstances, there exists a "cut-through" provision in reinsurance agreements that allows the consumer a direct right of action against the reinsurer.
