Can profit commission percentage be negative?
Does this mean the ceding company need to pay back to the reinsurer ?
Cheers
Howdy, Stranger!
Categories
- 241 All Categories
- 21 GENERAL
- 6 Practice Exam 1
- 6 Practice Exam 2
- 1 CAS Hybrid Exam
- 12 GLM.Basics
- 1 GLM.ModelBuilding
- 1 GLM.DataPrep
- 6 GLM.ModelSelection
- 4 GLM.Interactions
- 7 GLM.ModelRefinement
- 8 GLM.Validation
- 1 GLM.Comments
- 1 GLM.Variations
- Holmes.Intro
- Holmes.PenalizedRegression
- Holmes.Transformations
- Holmes.BiasAndVariance
- Holmes.LassoCredibility
- Holmes.Diagnostics
- Holmes.CaseStudy
- Holmes.Appendices
- 8 Fisher.RiskSharing
- 6 Fisher.OtherLSPlans
- 5 Fisher.AggExcess
- 19 Fisher.Visualization
- 4 Fisher.TableM
- 5 Fisher.LimitedTableM
- 7 Fisher.TableL
- 1 Fisher.Understanding
- 12 Fisher.CaseStudy
- 14 Bahnemann.Chapter5
- 10 Bahnemann.Chapter6
- 5 Bailey.Simon
- 5 Couret.Venter
- 5 NCCI.ExperienceRating
- 8 Mahler.Credibility
- 8 NCCI.Circular
- 1 NCCI.InformationalExhibits
- 1 ASOP.12
- ASOP25.Credibility
- 3 Bernegger.Exposure
- 5 Clark.Reinsurance
- 3 Clark.PropPerRisk
- 2 Clark.CasPerOcc
- 1 Clark.AggModels
- 2 Clark.PropertyCAT
- Grossi.Overview
- 1 Grossi.CATModels
- 4 Grossi.Curves
- Robertson.HazardGroups
Comments
Great question - reinsurance contracts are highly customized between the reinsurer and primary insurer but in general the profit commission percentge is not negative. The Clark paper doesn't make any mention of allowing a negative profit commission, so unless the exam question tells you it's part of the reinsurance contract, do not let the profit commission be negative.
Love the username - we definitely needed more coffee while coding this problem. It should be fixed now to place a floor at 0% on the profit commission.
Thanks!
Thank you!