Slide 1Slide 2What is Reinsurance?Why do Insurance Companies Buy this Stuff?Major Classifications of ReinsuranceClassifications of ReinsurersResponsibilities of a Treaty UnderwriterWhat’s Hot in Reinsurance?Notable Reinsurance ClaimsCareer Opportunities in Insurance & ReinsuranceCase StudyReReinsurance – Not for the Faint of HeartReHigh FinanceLarge PremiumsLarge LossesHigh Exposure Decision making process lies with senior management & boardComplicated ProgramsMaybe it is rocket science – (maybe not, but close to it)ReWhat is Reinsurance?Classic Textbook Definition“The transaction whereby the assuming insurer, for a consideration, agrees to indemnify the ceding company against all, or a part, of the loss which the latter may sustain under the policy or policies which it has issued.”ReWhy do Insurance Companies Buy this Stuff?1. Smooths results over time.2. Advice 3. Capacity4. Ease of Entry5. It is (was) cheap!ReMajor Classifications of Reinsurance1. Ceded vs. Assumed2. Treaty vs. Facultative3. Pro-rata vs. Excess of LossReClassifications of Reinsurers1. Direct Market(Professional)2. Broker MarketReResponsibilities of a Treaty UnderwriterDuties1. Marketing2. Underwriting analysis3. Financial analysis4. Audits5. Pricing analysis A treaty underwriter determines what companies will be reinsured, under what price, and under what conditionsReWhat’s Hot in Reinsurance?1. Not our results! 142% C/R in 20012. Terrorism – Limited or Excluded3. Mold – “Growing” Problem 4. Cyber Risk5. Asbestos Losses – Won’t go awayReNotable Reinsurance ClaimsReCareer Opportunities in Insurance & Reinsurance1. Underwriting2. Actuarial3. Claims4. Accounting5. Finance6. Loss Control/Risk Management7. Brokers/AgentsReCase StudyThe students have the role of Risk Managers of Six Flags Great America theme park.The park opening is set for June1. May 31, the insurance program renews and the broker advises no terrorism coverage will be provided for the renewal. Describe some challenges caused by the lack of terrorism coverage with regard to property and casualty exposures.Describe potential solutions to the
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