Modify the gross retention

Procedure

  1. In the policy transaction you created in Add reinsurance to a policy, select Tools > Reinsurance.
  2. Under Reinsurable Risks, select Location 1.

    On the Per Risk tab, the Gross Retention defaults to $1,000,000. This value is the amount of risk retained by the insurer prior to any amount ceded to the first surplus treaty. The Attachment Point of the Surplus Treaty #1 is $1,000,000.

    The following table shows the values for the agreements:

    Agreement Attachment Limit Share % Max Ceding Ceded Risk Prop % Lines Start line Stop line

    Quota share treaty

    1,000,000

    25

    $250,000

    $250,000

    22.3214

    Surplus Treaty #1

    $1,000,000

    $4,000,000

    $120,000

    $120,000

    10.7143

    3

    1

    4

    Surplus Treaty #2

    $4,000,000

    $15,000,000

    0

    11

    4

    15

    Net Excess of Loss Treaty

    $500,000

    $750,000

    100

    $250,000

    $250,000
  3. Cut the value of Gross Retention to 50% by entering 500,000 and clicking in another field such as PML Reason.
    • The limit for the quota share treaty is set to the value of the new gross retention, $500,000.
    • PolicyCenter scales the attachments and limits for the two surplus treaties.
    • The amount of reinsurance provided scales proportionally.
    • These changes do not affect the net excess of loss treaty.
    Agreement Attachment Limit Share % Max Ceding Ceded Risk Prop % Lines Start line Stop line

    Quota share treaty

    500,000

    25

    $125,000

    $125,000

    11.1607

    Surplus Treaty #1

    $500,000

    $2,000,000

    $620,000

    $620,000

    55.3571

    3

    1

    4

    Surplus Treaty #2

    $2,000,000

    $7,500,000

    0

    11

    4

    15

    Net Excess of Loss Treaty

    $500,000

    $750,000

    100

    $250,000