Insurance and Reinsurance field

Retention and Commission Report

objective:

The objective of this report is t o give an overview on the Reinsurance policy that has zero retention or commission rate is below 7.5%.

This report mainly covered four accounts in the year 2018 which are:

1- Eva club policy.

2- Tom construction policy.

3- Chrise Jewellery policy.

4- Louion Jewellery policy.

Analysis of reinsured policies for casualty line as follows:

Insured name	Total sum insured	Total premium	Foreign facultative premium	Retention premium	Special retention premium	Commission %	Commission amount
Eva club	3,750,000	42,857.	40,163.	0	2,695	6.7	2,694
Tom construction	144,375,000	123,215	87,121	36,094	0	6	4,792

1- Eva club policy:

· It is a new business which is a personal accident policy for a single football player with six months period. The policy has a sum insured of $ 3,750,000 and a Premium of the policy is $ 42,857.

· Reinsurance company has evaluated the risk to have a premium of 40,163. The remaining premium is $ 2695 which is to be retained as special retention which considered as commission amount.

2- Tom construction company :

· It is holding two covers types in one policy with total sum insured $ 144,375,000. This policy is covered employer liability 100% through the Celein insurance company with premium of $ 87121 and the second coverage is 100 % retained by Eliens insurance workmen’s compensation insurance policy of $ 36,094. Furthermore, the commission rate of the employer liability policy is 5.5% which is the commission amount $ 4,792.

Analysis of reinsured policies for property line s follows:

Insured name	Total sum insured	Total premium	Foreign facultative premium	Retention premium	Special retention premium	Commission %	Commission amount
Chrise	187,500,000	89,427.60	89,427.60	0	0	6	5,812.79
Louion	281,250,000	106,332.90	106,332.90	0	0	6	5,848.31

1- Chrise and Louion policies are fully fronted with reinsurance companies with getting below commission rate by 7.5%. However, the company’s benefit is the commission rather than losing the client to other competitors.

conclusion:

The reason for taking the low commission and zero retention in some policies as follow:

· There is no commission policy rate or retention rate are follow if the business comes from the related party.

· Business consideration such as major clients and brokers in the market which helps to build business relationship.

· The situation of insurance market makes the competitors accept a low commission or zero retention.