Hello everybody,
I am quiet new in Insurance market and want to understand excess of loss reinsurance.
For example, first layer is 1m in excess of 2 m. So if the loss is 1,5m, then reinsurer will pay only 0,5 and insurer 1m, yes?
Another example. There are two layers. First is 1m in excess of 2m. While the second is 3m in excess of 5m. So if the loss is 4m, how much does reinsurer pay? 2m according the first layer or 1m according the second layer?
Can, someone, explain this to me? I will be really grateful.
I am quiet new in Insurance market and want to understand excess of loss reinsurance.
For example, first layer is 1m in excess of 2 m. So if the loss is 1,5m, then reinsurer will pay only 0,5 and insurer 1m, yes?
Another example. There are two layers. First is 1m in excess of 2m. While the second is 3m in excess of 5m. So if the loss is 4m, how much does reinsurer pay? 2m according the first layer or 1m according the second layer?
Can, someone, explain this to me? I will be really grateful.