Format:    Course
Level:   Intermediate
Duration:   2 hours
CPD Points:   2

Reinsurance is insurance for insurance companies.  An insurance company, called the primary or ceding company, purchases insurance from another insurance company, know as a reinsurer.  Major unexpected losses can cause financial problems for an insurance company.  Such losses may arise from one large policy or from many small policies affected by one catastrophe (where the total aggregate of losses can reach many millions of rands).  These unexpected losses can cause financial problems for an insurance company.   

Intro to Reinsurance

Format:   Course     
Level:   Advanced
Duration:   2h 30 mins

The administrative cost of facultative reinsurance has led to it being largely replaced by automatic arrangements known as treaties.  In treaty reinsurance the primary insurer purchases cover for a class of insurance, e.g. property, public liability, motor.  Pricing and conditions are agreed before hand.  The primary insurer does not have the right to select what is ceded and the reinsurer cannot refuse cover.  We will look at quota share, surplus treaty, excess of loss and stop loss treaties in this course.

Treaty Reinsurance

Format:   Course
Level:   Advanced
Duration:   45 mins

This provides protection from the impact of a very large loss or a catastrophe.  The reinsurer agrees to pay any loss in excess of an agreed retention.  As in the case of surplus, XL may build into multiple layers.

Excess of Loss

Format:   Course
Level:   Advanced
Duration:   35 mins

Different types of companies buy reinsurance for different reasons.  The main reasons a primary insurer might purchase reinsurance are  1) to lower its exposure to either a single large risk or an accumulation of similar risks in the event of a catastrophe event occurring, 2) to allow it to write a volume of business greater than that possible with its existing capital and 3) to attempt to smooth the peaks and troughs of the underwriting cycle.  A company buying reinsurance from another company is said to be conducting  outwards reinsurance or 'ceding' a risk.  The company providing the cover, the reinsurer, is said to be conducting inwards reinsurance.

Buyers of Reinsurance

Format:   Course
Level:   Advanced
Duration:   30 mins

One of the main axioms in insurance is: "Do not underwrite your insurance portfolio "on the back" of reinsurance". This means that reinsurance will not turn a poor or a marginally profitable account into a profitable account in the long-term.  Reinsurance may help in the short-term but reinsurers cannot survive unless they also receive a profit from their reinsurance acceptances.  Consequently, reinsurance should be viewed as a partnership which is equally profitable for both parties in the long run.  In this course we will look at how retention is to be taken into account when structuring a property reinsurance program.

Structuring Reinsurance


Format:      Course
Level:         Advanced 
Duration:    45 mins

Although a syndicate seems to trade continuously from one year to the next with the same underwriter, each syndicate does in fact only trade for one year. After the end of that year, no new business is accepted, only the changes and amendments which affect the business already underwritten...

Reinsurance to Close


Duration: 1h 15 mins

At one time all reinsurance was facultative, that is negotiated on a case-by-case basis. These days its use tends to be restricted to cover a specific risk (e.g. a large chemical works) that falls outside the normal acceptance limits of the primary insurer.  This may be due to its catastrophe potential, or because it is specifically excluded from an existing treaty.  The risk is individually underwritten, and the retention and pricing agreed between the parties.

Facultative Reinsurance