After Hurricane Andrew hit south Florida in 1992 and caused $15.5 billion in insured damage at the time, it became clear that U.S. insurers had seriously underestimated the extent of their liability for property damage in a major disaster. Until Hurricane Andrew, the industry had estimated that $8 billion was the biggest disaster loss. The reinsurers then re-examined their position, forcing the first companies to reconsider their reinsurance needs in the event of a disaster. The term “optional” indicates that both the direct insurer and the reinsurer generally have the ability or ability to accept or refuse the individual bid (unlike the obligation to assign and accept the majority of reinsurance contracts). By covering the insurer against cumulative individual obligations, reinsurance gives the insurer more security for its own capital and solvency by increasing its ability to withstand the financial burden in the event of unusual and major events. Reinsurance is insurance. It is a way to transfer or “transfer” some of the financial risk that insurance companies take in insurance for cars, homes and businesses to another insurance company, the reinsurer. Reinsurance is a very complex global activity. In 2010, according to the American Reinsurance Association, about 7% of total premiums were set up by the U.S. property and casualty insurance industry (companies created specifically for reinsurance). reinsurance with a reinsurer who does not have an approved or equivalent status in the jurisdiction concerned.
An acronym for nuclear, biological, chemical and radiological exposures that can be defined in the reinsurance contract to exclude, limit or provide reinsurance protection. In the case of non-proportional reinsurance, the reinsurer only pays if the insurer`s total claims exceed a declared “preservation” or “priority” amount over a period of time. For example, the insurer can accept a total loss of $1 million, and it buys a $4 million reinsurance layer that goes beyond that $1 million. If there were to be a loss of $3 million, the insurer would bear $1 million of the loss and recover $2 million from its reinsurer. In this example, the insurer also retains a loss surplus of more than $5 million, unless it has acquired another excess layer of reinsurance. The CCRIF acts as a mutual that allows Member States to consolidate their risks into a diversified portfolio and acquire reinsurance products or other risk transfer products on international financial markets, which represents savings of up to 50% compared to what each country would cost if it were an individual civil protection purchase. Since a hurricane or earthquake affects only one or three Caribbean countries on average over a one-year period, each country contributes less to the reserve than would be necessary if each country has its own reserves.