Why it is used
It protects capital from many policies being affected by the same cyclone, earthquake, flood, or other event.
Reinsurance Intelligence · Catastrophe
All conceptsCatastrophe Excess of Loss
Cat XL responds to the accumulation of covered losses from one defined catastrophe event above the retention.
Illustrative example
A cyclone creates property losses across several locations that aggregate into one event under the hours clause.
Programme questions
- Event definition and hours clause
- Territory and peril
- Occurrence limit and reinstatements
Educational overview only. Reinsurance effect depends on the complete contract, programme structure, accounting basis, law, facts, and counterparties. The original insurer normally remains responsible to its policyholder.