Re-Insurance

Visão Geral

Who insures the insurer? When a Lagos company accepts a fire risk on a ₦2 billion refinery, it cannot afford to pay that claim alone if the plant burns down. So it does exactly what its own customers do: it passes part of the risk to someone bigger. That someone is a reinsurer, and the arrangement is called re-insurance, the quiet machinery that lets ordinary insurers safely accept risks far larger than their own pockets.

In this lesson you will learn what re-insurance really is and how it moves risk from one insurer to another, the difference between facultative and treaty cover, and how a single risk is carved up under quota share and surplus treaties. You will work through the splits examiners set, see why re-insurance is not the same thing as co-insurance, and meet the reinsurers that keep the Nigerian market standing.

Objetivos

  1. Define re-insurance and explain how it transfers risk from one insurer to another
  2. Distinguish facultative from treaty re-insurance
  3. Explain the functions of re-insurance, including capacity, stability and catastrophe protection
  4. Describe the uses of re-insurance in the Nigerian insurance market
  5. Distinguish re-insurance from co-insurance

Nota de Aula

A medium sized insurer in Port Harcourt is asked to cover an oil storage depot for ₦900,000,000. Its entire capital could not settle a total loss of that size, yet it does not want to turn the business away. The way out is re-insurance: the insurer accepts the whole risk to keep the client, then immediately passes most of it to a reinsurer. Master this one idea and you understand how a small company can safely write a giant risk, why insurers rarely collapse after a single disaster, and how the Nigerian market keeps premium income at home.

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  1. Re-insurance is best described as: A. The sharing of one risk among several insurers who all face the insured B. The transfer by an insurer of part of a risk it has accepted to another insurer C. The payment of a claim by instalments D. Insurance taken out by a member of the public Answer: B
  2. In a re-insurance transaction, the insurer that passes on the risk is known as the: A. Reinsurer B. Ceding company C. Retrocessionaire D. Lead insurer Answer: B
  3. An insurer holds a 30 per cent retention, 70 per cent cession quota share treaty. On a claim of 20,000,000 naira, how much does the reinsurer pay? A. 6,000,000 naira B. 14,000,000 naira C. 20,000,000 naira D. 7,000,000 naira Answer: B
  4. Which type of re-insurance is obligatory, so that the insurer must cede and the reinsurer must accept every qualifying risk automatically? A. Facultative B. Treaty C. Retrocession D. Co-insurance Answer: B
  5. The process by which a reinsurer re-insures part of a risk it has accepted with another reinsurer is called: A. Retention B. Co-insurance C. Retrocession D. Subrogation Answer: C

Livros Recomendados

Principles of Risk Management and Insurance
Principles of Risk Management and Insurance
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Fundamentals of Risk and Insurance
Fundamentals of Risk and Insurance
Legenda: Tenth edition
Editora: Wiley
Ano: 2008
ISBN: 978-0-470-08753-4
Descrição: A clear account of the nature of risk and the economics of insurance, written for beginning students across life, health, property and liability insurance.
Fundamentals of Insurance
Fundamentals of Insurance
Legenda: Second edition
Editora: Himalaya Publishing House
Ano: 2017
ISBN: 978-93-5097-079-9
Descrição: An accessible treatment of insurance in four parts: the basics of risk, insurance management, life insurance and non-life insurance.

Perguntas Anteriores

Pergunta-se como são as perguntas anteriores sobre este tópico? Aqui estão várias perguntas sobre Re-Insurance de anos passados.

WAEC SSCE - Insurance - 2015

Pergunta 1 Relatório

Explain the following terms as used in insurance.

(a) re-insurance

(b) Loss adjusters

(c) underwriters

(d) brokers

(e) assessor

 

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