Reinsurance and Retentions -- A London Market Actuaries Group Paper, Volumes I and II (GISC Convention, 10/90)

The working party adopted the following terms of reference: To provide a review of some current practices in the field of reinsurance retentions. To investigate and discuss those aspects of general insurance operations which we believe should influence the reinsurance decision process. To present a synopsis of practical methods that may be used in order to translate the identified objectives of reinsurance into an explicit programme and retention policy. We have defined the retention of a general insurance operation as all business which is not ceded including coinsured layers of excess of loss reinsurance, and any unplaced parts of the operation's reinsurance programme. We stress that we have used the word retention in its literal sense, namely, an amount retained. We consider that a company which has, for example, reinsured itself £90 million excess of £10 million has decided to retain claims excess of £100 million.