Hello there, Please find the below picture for the questions to answer. The word

Question

Hello there,
Please find the below picture for the questions to answer. The word limit is 500words so please devide on to the number of questions, you may for example use more words in one questions than the other which is fine. As long as it 500 words in total to answer all the questions. Not 500 words for each question.
Hello there,
Please find the below picture for the questions to answer. The word limit is 500words so please devide on to the number of questions, you may for example use more words in one questions than the other which is fine. As long as it 500 words in total to answer all the questions. Not 500 words for each question.


g : .1.3x ::|| TNormalTNo Spac Heading 1 Heading 2 Title Subtitle Paragraph Styles Font Area 4- Reinsurance 1. 2. 3. 4. 5. What do you consider to be the role of reinsurance? What are the main types of reinsurance? Can you explain how they operate? Are you clear on the difference between proportional and non-proportional reinsurance? Are you able to identify the advantages and disadvantages of each from an insurers perspective when seeking to reinsure a risk?

Explanation / Answer

1) Role of reinsurance are:

2) Main types of reinsurance are:

3) If an insurer keeps 100% of the risk, the insurer will have to bear all the liability and may have the chance to lose money when claims arise. But in reinsurance, the insurance company transfers a portion of risk to another known as insurer. Legal rights of policyholder are no where affected by the reinsurance. Reinsurance lets insurers cover their risks by recovering some or all of the amounts they have to pay to policyholder. Reinsurance reduces net liability on individual risks and gives protection from large or multiple losses. It also provides ceding companies the capacity for increasing their underwriting capabilities in terms of the number and size of risk.

4) In the proportional reinsurance, the premiums and claims are shared on the basis of proportional calculations as the ceding company and reinsurers shares each and every dollar of premium and each and every claims in accordance to the percentage that was initially determined in the contract. Where premium in non-proportional reinsurance is to be paid in advance and subject to adjustment at the end of the contract period and the reinsurers only share claims that exceeding the retention of the ceding company.

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