allocation of premiums in chapter 9 - reinsurance
the phrase 'allocation of premiums' is mentioned quite a few times throughout chapter 9, and I'm wondering why premiums would have been a concern, when the focus of the chapter is on liability/loss recovery.
Comments
This chapter is not focused on liability/loss recovery but more of on reinsurance in the IFRS17 context
could you expand a bit more on allocation of premiums still? I did not quite understand where we are allocating to and on what basis and for what purpose
There actually isn't too much written about allocation of premiums - The only part which goes into detail about this is the fact that an insurer can choose to combine income and expense together in the financial statements or they can do an allocation of premiums and amounts recovered.
This is more of an accounting topic but my understanding of this is that allocation of premiums just refers to some of the premium adjustments that go on between cedant and reinsurer( i.e. profit sharing, ceding commissions, etc) Unfortunately, I do not work in reinsurance and can't provide much detail beyond what is in the material which is very light to begin with on this specific topic