Reinsurance screen in the policy file

Ceded Premium Recalc Reason

This field appears if you edit the reinsurance for a policy directly in the policy file rather than as part of processing a policy transaction.

Click Edit to display this field. Enter a reason for recalculating the ceded premium. If this value results in a change to ceded premium, this reason appears on the View Ceded Premiums screen for all views except All Transactions. PolicyCenter displays the reason after running the Premium Ceding batch process.

View As Of

This drop-down list shows the ranges of dates for programs that apply during the policy period. For loss attachment agreements, PolicyCenter selects the agreement that applies at the loss date rather than the policy period start date.

Risk

Risks are typically defined at the level of a single location (for owned property) or at the level of the whole policy (for liability). There is one risk for each combination of level and reinsurance coverage group.

For example, you might have two property risks on a location if there is one risk for normal property coverages and a separate risk for terrorism coverage. Terrorism coverage is often reinsured in a different way.

Coverage Group

The reinsurance coverage group of the risk.

TIV/Sum Insured

The total insured value, sometimes referred to as sum insured. The maximum amount for any single risk that could be paid for all coverages that are part of the risk.

Probable Max Loss %

Enter the probable maximum loss as a percentage of total insured value.

PML Amount

The probable maximum loss. Usually, PML equals TIV, but may be less if Probable Max Loss % is less than 100.

You can use the PML Amount to adjust the amount of risk used for allocating reinsurance. Specify the PML Amount if it is extremely unlikely that there will be a loss as large as the TIV.

For example, a policy has multiple buildings at the same location. However, large distances separate the buildings. Therefore, it is very unlikely that the same fire will destroy all buildings.

Per Risk tab

Total Risk

The total risk. This risk is the total insured value or PML, if adjusted by Probable Max Loss %.

Covered by XOL

The amount of risk covered by all excess of loss agreements.

Shared Among Prop

The amount of risk shared among proportional agreements. This value is Total Risk minus Covered by XOL.

Gross Retention

The amount of risk retained by the insurer prior to any amount ceded to the first surplus agreement. If there is a quota share treaty attached to this risk, this value defaults to the Coverage Limit of the quota share treaty. If this risk does not have a quota share treaty, then the value defaults to the Max Retention of the first surplus treaty. Specify the Max Retention on the Reinsurance > Treaty screen.

You can modify the gross retention. However, the value must be less than or equal to the Max Retention of the first surplus treaty. For an example, see Gross retention.

Retained Prop Share (%)

The percentage of risk retained by the insurer of the total shared among proportional agreements.

Prop Retention

The amount of risk retained by the insurer. This amount is the Retained Prop Share (%) expressed as an amount.

Covered By NXOL

The amount of risk covered by all net excess of loss agreements.

Net Retention

The net amount of risk retained by the insurer after ceding risk to all per risk reinsurance agreements.

Target Max Retention

The target maximum retention. This retention is the value of Target Max Retention on the Reinsurance Program screen.

If the insurer’s net retention on the current risk exceeds this value, PolicyCenter creates an underwriting issue. An underwriter can approve an exception, put in place a facultative agreement, or decline the policy.

For more information about the underwriting issue, see Reinsurance net retention underwriting issue type.

Fac RI Needed

Facultative reinsurance needed. If the Target Max Retention is exceeded, this is the overage. The overage is the amount of risk that facultative reinsurance could cover to bring the actual retention down to the Target Max Retention.

Agreement Number

The agreement number.

Name

The agreement name.

Type

The type of agreement.

Attachment

The attachment point.

Limit

The coverage limit.

Share %

The ceded share percentage. This percentage is the Ceded Share (%) on the Treaty or Facultative Agreement screen.

Max Ceding

Per risk only. The maximum amount of risk that can be ceded.

Ceded Risk

Per risk only. The amount of risk that was ceded. In the default configuration, Ceded Risk is always set to the value of Max Ceding.

In some cases, the insurer agrees to cede less risk that the maximum amount based on the characteristics of an individual risk. In this case, ceded risk can be less than Max Ceding. For more information, see Reinsurance configuration plugin.

Prop %

Per risk only. For each proportional treaty, its percentage of the Shared Among Prop. This value is calculated according to the following formula:

    Ceded Risk / Shared Among Prop

Inclusion

Whether or not to include a risk in coverage by a treaty. This field has the following values:

Included – Default. Include a risk in coverage for a treaty. This value does not appear in the Inclusion column.

Excluded – Exclude a risk from coverage by a treaty. For example, this risk does not fit the treaty for a reason that the system cannot determine automatically.

Special Acceptance – Make a special inclusion that cedes risk to a treaty even though it would not normally. In the base implementation, this is the same as Included. You can customize this inclusion to meet your needs.

Excluding a risk from coverage has a particular behavior if a reinsurance program spans more than one term. If you exclude a risk from coverage by an agreement in a later term, PolicyCenter excludes the risk in that term and in later terms. PolicyCenter excludes the agreement by creating an inclusion row for the later terms. PolicyCenter does not exclude the agreement in prior terms.

See AttachmentInclusion in Properties of risk version lists.

Projected

This field displays the value Projected if PolicyCenter selected an agreement from a draft program or an active program in a prior year. For more information, see How Reinsurance Management selects a projected program if active program is unavailable.