Empirical Study on Appropriate Net Retention of Excess of Loss Reinsurance in Commercial Fire Insurance～A Case Study of “C” Company

• Main Authors: Ying-Hao Weng, 翁英豪
• Other Authors: 高棟梁
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/63054960815239782398

碩士 === 淡江大學 === 保險學系保險經營碩士在職專班 === 95 === Due to the non-homogeneous and accumulated character of risk in fire insurance, in order to effectively manage and reduce the uncertainty of risks, it is usually required to utilize reinsurance to spread the risk and strengthen the insurer''s capacity. For a long time, the domestic property insurance companies have been using proportional reinsurance method to redistribute massive business to reinsurers. Although they earn a greater amount of reinsurance commission, it restricted the accumulation of capital and technical advancement. In the past few years, because of the frequent reports of domestic market loss and the rapid shrinking of the reinsurance market after 911-terror attack, reinsurers withdraw from Taiwan market or only are willing to provide non-proportional reinsurance capacity. Therefore, there are many domestic companies using excess of loss reinsurance treaty. Their performances have yet to be conclusive because of short time period. But accompanied by the related methods such as elevating the underwriting skill and enhancing the loss prevention technique, positive effects have been shown. Due to the lack of proportional reinsurance capacity and low premium retention, companies continuing proportional treaty reinsurance face severe competition. Therefore, in order to take advantage of excess of loss insurance and to select the most suitable reinsurance treaty with a minimum cost, it should be understood that management must increase its efficiency. This essay focuses on the commercial fire insurance business of “C” company. By using burning cost method under different retention of excess of loss reinsurance treaty, we can estimate the net retained premium. The result can be compared to the proportional reinsurance treaty. By further related hypothesis testing we would then reach a consensus reinsurance treaty recommendation for “C” Company.