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First excess of loss treaty limit = five hundred thousands in excess of five hundred thousands
2nd Ex.loss treaty limit = one million and five hundred thousands in excess of one million
3rd excess of loss treaty limit = two million and five hundred thousands in excess of two million and five hundred thousands
The insurance company underwrite a risk with total sum insured ten million.
Reinsurer XXY participate with seventy percent share across the board plus hundred percent facultative share covering the amount that exceeding the treaty capacity .
H ow much will the Reinsurer XXY pay for a total loss claim amounted ten million
Thanking you.
Wish you happy new year.
Total treaty capacity = 5, 000 , 000.
Total amount of claim under excess loss treaty = 5 , 000 , 000
cedent (insurance company) share in claim = 500,000
excess loss treaty's layers shares will be as follows :-
First excess loss treaty share in claim = 500 , 000
2nd excess loss treaty share in claim = 1 , 500 ,000
3rd excess loss treaty share in claim = 2 , 500 ,000
Total treaty (first ,2nd and 3rd) share = 4 , 500 , 000
Reinsurer 's XXY share in the claim 70 % = 3 , 150 , 000
Surplus placed facultatively 5 , 000 , 000
Reinsurer's XXY facultative share in claim 100% = 5 , 000 , 000
Reinsurer XXY Total payment in claim will be = 8 , 150 , 000
Very best wishes and Happy New Year.
first excess loss
Thanks for invitation,
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