Ceding premium to excess of loss agreements
If there are excess of loss (XOL) agreements with flat ceding
amounts, cede those amounts. Cede any markup on these agreements. Calculate
the gross net premium (GNP)
as follows:
GNP = Written Premium - XOL Ceded Premium - XOL MarkupNote: When calculating the GNP in the
default configuration, cedings are only deducted from facultative excess
of loss agreements and not from excess of loss treaties. If you expect
to have programs with excess of loss treaties above proportional layers,
you can configure Reinsurance Management to calculate GNP for this case.
The proportional treaties share the gross net premium (GNP) after ceding to any excess of loss agreements.
Net excess of loss and aggregate treaties are not deducted because they apply only to the insurer’s net risk after deducting risk ceded to proportional agreements.
The process continues and calculates the ceded premiums for proportional risks. See Ceding premium to proportional agreements