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Treaty Proposional

Treaty reinsurance (Treaty Proposional) occurs whenever the ceding company agrees to cede all risks within a specific class of insurance policies to the reinsurance company. In turn, the reinsurance company agrees to indemnify the ceding company of all risks therein, even though the reinsurance company has not performed Individual Underwriting for each policy. Often, the reinsurance applies even to those policies that have not yet been written so long as they pertain to the pre-agreed class.
The most important characteristic of a treaty agreement is the lack of individual underwriting on behalf of the assuming insurer. This structure transfers underwriting risks from the ceding company to the assuming company, leaving the assuming company exposed to the possibility that the initial underwriting process did not adequately evaluate the risks to be insured.
There are different kinds of treaty agreements. The most common are called proportional treaties, in which a percentage of the ceding insurer's original policies is reinsured, up to a limit. Any policies written in excess of the limit are not be covered by the reinsurance treaty.
For example, one reinsurance company might agree to indemnify 75% of the original insurer's automobile policies up to a $100 million limit. This means the ceding company is not indemnified for $25 million of the first $100 million in auto policies written under the agreement; that $25 million is known as the ceding company's "retention limit." If the ceding company writes $200 million worth of automobile insurance, it retains $25 million from the first $100 million and all of the subsequent $100 million, unless it arranges a surplus treaty. Generally speaking, reinsurance policy premiums are lower when retention limits are higher.

Our Clients for Treaty Reinsurance are :

Leader : Reasuransi Nasional Indonesia (Nasre)
Member :
  1. Asuransi Kredit Indonesia (ASKRINDO)
  2. Asuransi Staco
  3. Asuransi Bumiputera Muda (BUMIDA)





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Item Reviewed: Treaty Proposional Rating: 5 Reviewed By: EnergyRe Reinsurance Brokers