Whole account protection

Whole account protection is a cover of last resort responding on the whole of a cedant's net account, all lines and all causes combined, after every other treaty has operated. It triggers on net result or on aggregate net losses exceeding a threshold, and is thereby distinct from every treaty reasoning line by line or peril by peril. The problem it solves is cross-line accumulation, which the usual program architecture does not see: each treaty does its job within its own scope, and nobody protects against the year in which three lines deteriorate at once without any of them breaching its own retention. It is the cover for the correlation scenario, precisely the one capital models struggle to quantify. It is rare and expensive, since the reinsurer takes on all of a cedant's underwriting drift at once, and it almost always comes with substantial cedant participations and tight caps.

A cedant buys an 80 million euro whole account protection in excess of 240 million of aggregate net losses in 2026, with a 10 percent participation for its own account. The year combines an adverse hail season, deterioration in professional liability and two major cyber losses, for 291 million net. The cover pays 45.9 million, and the cedant keeps 5.1 million through its participation.

Whole account protection, Whole account cover, Couverture tous risques du compte, Protection globale