Calculate apportionment of premiums and claims for policy

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Reference no: EM134027818

Problem

SA Ltd is a medium-sized casualty insurer.

It has a combined reinsurance programme to manage its risk exposure as follows:

1. A quota share treaty with a £2 million limit, a net retention of 25% and a cession of 75%.
2. A four-line surplus treaty with a gross retention of £2 million.
3. An excess of loss layer to protect its net retention with a limit of £250,000 excess of £250,000.

During the past year, SA Ltd underwrote various policies including the following three that incurred individual
large claims from ground up (FGU):

Policy Sum Insured (£) Premium (£) Claims (£) FGU
Policy 1 5,000,000 400,000 3,000,000
Policy 2 7,000,000 600,000 1,000,000
Policy 3 10,000,000 700,000 8,000,000

1. Calculate, showing all your workings, the apportionment of liability for each of Policy 1, Policy 2 and Policy 3 between SA Ltd and its reinsurers. Get the instant assignment help.

2. Calculate, showing all your workings, the apportionment of premiums and claims for each of Policy 1, Policy 2 and Policy 3 between SA Ltd and its reinsurers.

3. Calculate the claims recoveries for each of Policy 1, Policy 2 and Policy 3 from SA Ltd's excess of loss reinsurers.

Reference no: EM134027818

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