Loss Portfolios: Financial Reinsurance

The property-casualty insurance operating environment has changed dramatically. Total return is more a function of investment results than ever before. Competition has pressured rate levels. And a greater proportion of total premiums is coming from "long tail" lines, making reserving more difficult. Reinsurance is becoming somewhat more financial oriented. Loss portfolio transfer reinsurance is becoming popular for a variety of reasons, not the least of which involves poor operating results. This paper surveys loss portfolio transfer reinsurance from a benefit-cost standpoint and includes actuarial, tax, accounting and contractual aspects necessary to the evaluation process. Reinsurance Research - Pricing/Contract Design