Why it is used
It protects the cedant against severity while leaving ordinary losses within its net account.
Reinsurance Intelligence · Non-proportional treaty
All conceptsExcess of Loss
The reinsurer pays covered loss above the cedant's retention up to the layer limit.
Illustrative example
A OMR 5m excess OMR 2m layer may pay the portion of a covered OMR 6m loss between OMR 2m and OMR 7m.
Programme questions
- Ultimate net loss
- Attachment and exhaustion
- Per-risk, per-event or aggregate basis
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.