Reinsurance

Reinsurance passes part of your risks to reinsurers. Once the treaties are set up, every policy and claim is shared automatically.

Reinsurers

Reinsurance > Reinsurers lists reinsurers, co-insurers and reinsurance brokers, with their rating, the agency and date of the rating, and a credit limit: the most they should owe you at once. They may owe us adds up the recoveries not yet collected, statement balances in your favour and their share of the reserves on open claims. Once a week, if it goes above the limit, the users who approve reinsurance are told.

Treaties

Reinsurance > Treaties > New: the type, the underwriting year, the policies it covers (policies starting between two dates, in some lines or products), then the terms.

• Quota share: a fixed percent of every risk, for example 30%.
• Surplus: you keep one line (the retention); the treaty takes what is above it, up to a number of lines. A 150,000 retention with 4 lines takes up to 600,000 of a risk.
• Excess of loss (per risk): layers that pay the part of one claim (after proportional reinsurance) above the attachment, up to the limit.
• Catastrophe excess of loss: the same, on the total of all claims coded to one catastrophe event.

Proportional treaties have a reinsurance commission (given back on the premium ceded) and may have a profit commission. Excess of loss layers have reinstatements: when a layer pays, it is reinstated for a premium in proportion to the cover used.

On the treaty's page add the reinsurers and their shares (together 100%) and, for excess of loss, the layers.

What happens automatically

When a policy is issued, renewed, endorsed or cancelled, the premium is ceded: facultative placements first, then quota share, then surplus on what is left. When a claim is paid, the same shares of the payment are ceded. The Reinsurance tab of the policy shows each cession and what you keep.

• If a policy is above what the treaties can take, the underwriters are told how much has no reinsurance.
• A claim payment that gives a reinsurer 50,000 or more to pay raises a cash call: they are asked to pay now rather than on the next statement.
• When what you keep of a claim, or of all the claims of a catastrophe event, goes above an excess of loss layer, a recovery is raised for each reinsurer on it, with the reinstatement premium.

Facultative

Reinsurance > Facultative places a share of one policy with reinsurers case by case: the policy, the percent placed, the commission, the slip reference, and the reinsurers with their shares of the slip (together 100%). Bind makes it effective: premium already ceded on the policy is re-allocated between the placement and the treaties. Policies above capacity lists active policies that still have part of the sum insured without reinsurance. From a policy, Place facultative on the Reinsurance tab opens the form for it.

Statements, settlement and profit commission

Reinsurance > Statements and accounts > Draw up a statement puts everything ceded to a reinsurer up to a date, and not yet on a statement, on one statement: premium, less commission, less claims (less cash calls already received). A positive balance is what you owe them; a negative one what they owe you. Record payment or Record money received settles it. Current account lists all statements with one reinsurer.

At the end of a treaty year, Profit commission on a quota share or surplus treaty shows a reinsurer's result (premium less commission, claims paid, their share of open reserves and their expenses) and books their share of the profit as a statement they owe you.

Recoveries

Reinsurance > Recoveries follows cash calls, layer recoveries and any recovery you add by hand until collected. Record money received can be partial. Recoveries past their due date are on the Overdue tab, and the reinsurance team is reminded weekly.

The overview

Reinsurance > Overview shows, for an underwriting year, the premium written and ceded, claims ceded and commission received, what is still to collect, the result of each treaty, each reinsurer's credit exposure against its limit, and each catastrophe's paid losses, recoveries and the cost you keep.