Specialization · 2 coursesHow a risk is shared between a cedant and its reinsurer, and what that sharing costs. It opens with the decision that precedes everything, treaty or facultative; it then works through the two families of sharing, the one that follows a fraction and the one that follows an amount; and it closes on the three numbers that decide a renewal, the commission, the burning cost and the rate on line, saying each time what they do not measure.
0 of 2 courses passedSee the detail →Specialization · 2 coursesWhat happens when capacity stops coming from a reinsurer and starts coming from the capital markets. The cat bond and the collateral that replace a promise to pay with money already locked up, the sidecar that rents capital for one season, the industry loss warranty that triggers on other people's losses, the gap between the index and yourself known as basis risk, and retrocession, which the London market showed at the turn of the 1990s can circulate a risk instead of spreading it. Then three forms that leave natural perils behind: the extreme mortality bond, which protects a life book against the common cause shock, retrospective reinsurance, which cedes losses that have already occurred and never extinguishes the obligation toward the policyholder, and the captive behind a fronting insurer, which keeps most of the risk within the group and transfers only the peaks, through its own reinsurance, and a credit risk, to the fronting insurer.
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