An insurance company insures marine cargo risk for a total sum insured Euro 150,000,000.

Question

The insurance company have a qouta share & Surplus treaty , total capacity100,000,000.

The question :-

Attempt to trace the reinsurance placing for100% of the insured risk , bearing in mind the following :-

1) Qouta share treaty capacity50% of100% , of which ceding company's retention25% .

2) Surplus treaty capacity50% of100% .

Wish you good luck.

RUKHSAR AHMAD RUKHSAR AHMAD · Answer

orient insurance company they connected with al futtaim motors

Mamoun elbaghir abdalla mhamad Eltayeb · Answer

The quota-share &surplus reinsurance placing as follows :-

(A )Quota -share treaty reinsurer's share =50% of100% =50,000,000

(B) Ceding company's retention =25% of50% of100% =12,500,000

(C) Quota -share reinsurer's share =75% of50% of100% =37,500,000

(D) Surplus treaty reinsurer's share =50% of100% =50,000,000

Therefor the total treaty capacity fully utilized and placed (100% ) =100,000,000

But we have still surplus amount equal50,000,000 part of the total sum insured 150,000,000 how we cover it , the answer definitely is = THIS AMOUNT IS SURPLUS AND BEYOND THE AUTOMATIC TREATY CAPACITY , HENCE SHOULD BE FACULTATIVELY PLACEDTherefor facultative reinsurer's share =50,000,000

Kind regards

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An insurance company insures marine cargo risk for a total sum insured Euro 150,000,000.

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