Published on August 7, 2007
Life Reinsurer The Silent Partner: Life Reinsurer The Silent Partner What is reinsurance?: What is reinsurance? Passing of risk to a third party Contract between two insurance companies Client Life Insurance Co. Life Reinsurer Retrocessionaire What risks can be reinsured?: What risks can be reinsured? All policy risks can be reinsured Mortality Morbidity Longevity Others Investment earnings Lapse Recovery of acquisition expenses Reinsurance Types: Reinsurance Types Automatic / Treaty Proportional / Quota Share Non-proportional / Excess Hybrid Facultative Large / sub standard risks Catastrophe risk cover Motivation Risk sharing Financial reasons/concerns Reinsurers as Partners: Reinsurers as Partners Risk mitigation Business growth Innovation Skill development Advantage of global knowledge India: India India Life Insurance - Objectives: India Life Insurance - Objectives Indian Life Insurance company Focus on growth – premiums / volumes Competitive advantage – products, skills Reduce uncertainty or volatility Optimise use of shareholder capital Life insurance industry (IRDA Mission) Protect the interests of the policyholders Orderly growth of the insurance industry Partnering to Mitigate Risk: Partnering to Mitigate Risk For Co. - Reducing uncertainty and volatility Derisking the balance sheet Taking a large share of large risks Risk selection tools and risk classification Assisting in setting pricing basis For industry - ensuring 'Orderly Growth' Derisking with support of global balance sheet Large-risk covers mitigate default risk Mortgage covers, keyman covers Partner in Business Development: Partner in Business Development Helping companies focus on growth Assisting in expanding the market CI and Disability products Lack of Indian health statistics Group products Lack of experience data Enabling higher capital utilisation Higher premium to capital ratio Re can support growing capital needs Partner in Skill Development: Partner in Skill Development Actuarial Product design; Pricing basis Underwriting Improving practices; Training resources Claims management Strategic / new business planning Access to Global Practices Slide11: Resources and time dedicated to risk management Balance sheet Relevance has increased in these uncertain times Insurer Reinsurer 20% 80% Local Global Vs. Cost of Partnership: Cost of Partnership Policyholder Expenses, Investments Risk Premium Reinsurance Premium Insurer Expenses, Profit Claims Thank you.: Thank you.