Page 9

thesuperactuary

On the source reading page 9 (the smaller part of section 2.1),

I understand that they are explaining the concept of data aggregation for reinsurance contracts. I don't quite understand what they are saying (my understanding is to treat reinsurance contracts to be similarly as insurance level aggregation, but separately?)

Can someone share some lights on this section?

Thank you

graham

That's right. Aggregation of reinsurance contracts held is done independently from aggregation of "regular" underlying insurance contracts.

The text also goes on to say that the general principles for aggregating reinsurance contracts held into portfolios and groups is the same as for "regular" underlying insurance contracts, but there a few things that make aggregation for reinsurance contracts different:

• Reinsurance contracts held cannot be onerous (so that wouldn't be a consideration when aggregating.)
• A single reinsurance contract may cover many regular underlying contracts so it's possible for a "group" of reinsurance contracts to have only 1 reinsurance contract in it (whereas it would be unusual for underlying insurance contracts to have a group with only 1 contract in it.)

thesuperactuary

Thank you!