Re-Insurance

Resumen

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 la lección

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.

Evaluación de la lección

Felicitaciones por completar la lección del Re-Insurance. Ahora que has explorado el conceptos e ideas clave, es hora de poner a prueba tus conocimientos. Esta sección ofrece una variedad de prácticas Preguntas diseñadas para reforzar su comprensión y ayudarle a evaluar su comprensión del material.

Te encontrarás con una variedad de tipos de preguntas, incluyendo preguntas de opción múltiple, preguntas de respuesta corta y preguntas de ensayo. Cada pregunta está cuidadosamente diseñada para evaluar diferentes aspectos de tu conocimiento y habilidades de pensamiento crítico.

Utiliza esta sección de evaluación como una oportunidad para reforzar tu comprensión del tema e identificar cualquier área en la que puedas necesitar un estudio adicional. No te desanimes por los desafíos que encuentres; en su lugar, míralos como oportunidades para el crecimiento y la mejora.

  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

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Preguntas Anteriores

¿Te preguntas cómo son las preguntas anteriores sobre este tema? Aquí tienes una serie de preguntas sobre Re-Insurance de años anteriores.

WAEC SSCE - Insurance - 2015

Pregunta 1 Informe

Explain the following terms as used in insurance.

(a) re-insurance

(b) Loss adjusters

(c) underwriters

(d) brokers

(e) assessor

 

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