Fall 2016 Q21
I'm not quite getting why the premium for the $1M-$4M layer is counted as subject premium for the treaty. Aren't we just pricing the $4M-$8M layer?
I'm not quite getting why the premium for the $1M-$4M layer is counted as subject premium for the treaty. Aren't we just pricing the $4M-$8M layer?
Comments
This is one of those facts you have to memorize. In reinsurance the subject premium for a treaty is the cedant's premium net of any premiums for reinsurance inuring to the benefit of the treaty being priced.
Ah ok thanks, that's easy enough I suppose. I just wanted to be sure there wasn't something tricky/special about this question that I was missing.