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© 2014 General Re Corporation Analyze Does your reinsurance program contain adjustable rates and/or commissions? What happens when losses are more than expected? Analyzing the implications of adverse loss scenarios with your reinsurer can help determine how your reinsurance will respond when you really need it, and how that response fits with your risk tolerance. Are you looking for protection from volatility? Consider a wide swing or retrospectively-rated plan Consider an AAD or increasing your net retention Consider a guaranteed cost option Consider buying NO reinsurance Consider a contingent commission Start here! Are you willing to risk a large portion of your surplus? Does your regulator require you to purchase reinsurance? Do you know how your reinsurance program will react to a limits loss? Do you know how it will react to multiple large losses in a single year? Do you know how it will react to large losses in consecutive years? What if multiple members/policyholders are involved in the same event? Is consistency of reinsurance cost the most important factor for you? Are you comfortable making additional payments after a large loss? Is cashflow important to your organization? Look for more information in upcoming blogs on each of the structures suggested, as well as ways to "stress test" each of them. Abraham Kane /in/abekane IN [email protected] E +1 203 328 5488 P Don Curtin /in/don-curtin IN [email protected] E +1 404 365 6805 P Recommendations Our DOES YOUR REINSURANCE PROGRAM MATCH YOUR RISK APPETITE?

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Page 1: Stress Testing Your Reinsurance Program

© 2014 General Re Corporation

Analyze

Does your reinsurance program contain adjustable rates and/or commissions? What happens when losses are more than expected?

Analyzing the implications of adverse loss scenarios with your reinsurer can help determine how your reinsurance will respond when you really need it, and how that response fits with your risk tolerance.

Are you looking forprotection from volatility?

Consider a wide swing or retrospectively-rated plan

Consider an AAD or increasing your net retention

Consider a guaranteedcost option

Consider buying NO reinsurance

Consider a contingent commission

Starthere!

Are you willing to risk a large portion of your surplus?

Does your regulator requireyou to purchase reinsurance?

Do you know how yourreinsurance program

will react to a limits loss?

Do you know how it will react to multiple large losses

in a single year?

Do you know how it willreact to large lossesin consecutive years?

What if multiple members/policyholders are involved in the same event?

Is consistency ofreinsurance cost the most important factor for you?

Are you comfortablemaking additional payments

after a large loss?

Is cashflow important to your organization?

Look for more information in upcoming blogs on each of the structures suggested, as well as ways to "stress test" each of them.

Abraham Kane /in/[email protected]+1 203 328 5488P

Don Curtin /in/[email protected]+1 404 365 6805P

RecommendationsOur

DOES YOUR REINSURANCEPROGRAM MATCH YOUR RISK APPETITE?

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