Reinsurance optimization
Michiel van Dellen
michiel.vandellen@arcturus.nl
An important and difficult part of risk management for an insurer is optimizing reinsurance. Purchase of reinsurance influences the profit, the legal capital requirement and the future financial position of the insurer. There are several aspects of reinsurance that make it difficult to select a reinsurance product.
Michiel van Dellen
michiel.vandellen@arcturus.nl
Buying reinsurance often involves a lower profit margin. The reinsurer requires part of the expected profit to take over the risk from the insurer. But which part is realistic? And how much is the risk reduced by a specific type of reinsurance? Is the impact of the reinsurance choice on the Solvency II capital requirement sufficiently taken into account? Thanks to years of experience in the non-life actuarial profession, Arcturus has developed methods to adequately support insurers in this choice.
Example of how different reinsurance contracts can stabilize an insurer’s claims ratio.
For you as an insurer it is important to know what the risk drivers are in your portfolio. Arcturus can inventory and quantify this together with you. Also consider:
- The impact of climate change on weather damage
- Amendments to Liability Law
- Relevant catastrophe scenarios based on geographic features of your portfolio
Based on these results, an optimal reinsurance program can be determined for you. Which reinsurance program is most efficient for you? How much risk do you want to spend and how much are you willing to pay for it?
Arcturus calculates the effects of various programs on your capital position for you.
More profit and volatility, or less risk? Which scenario is most suitable for you?
Would you like more information or are you interested in what Arcturus can do for you? Please do not hesitate to contact us!