What is bordereau used for?
The term bordereau is used to describe most lists or reports of premium or losses required under the reinsurance contract from the reinsured to the reinsurer. In the facultative context, where an individual risk is reinsured, a bordereau is not necessary.
What is an insurance Cedant?
Cedent — a ceding insurer or a reinsurer. A ceding insurer is an insurer that underwrites and issues an original, primary policy to an insured and contractually transfers (cedes) a portion of the risk to a reinsurer.
Why is it called bordereau?
The word bordereau comes from the middle French word bordrel and the old French word bort. Both mean border, edge, or margin. Bordereau is one of many terms borrowed from the art world that are used in the reinsurance industry. Such terms are used in many professions to set apart insiders from others.
Why do insurance companies reinsure?
Insurers purchase reinsurance for four reasons: To limit liability on a specific risk, to stabilize loss experience, to protect themselves and the insured against catastrophes, and to increase their capacity.
Who is the cedant?
A cedent is a party in an insurance contract who passes the financial obligation for certain potential losses to the insurer. In return for bearing a particular risk of loss, the cedent pays an insurance premium.
Do reinsurers have underwriters?
Underwriting expenses, and in particular personnel costs, are higher for such business because each risk is individually underwritten and administered. However, as they can separately evaluate each risk reinsured, the reinsurer’s underwriter can price the contract more accurately to reflect the risks involved.
Why do insurers reinsure?
This is done for four reasons: to limit liability on a specific risk in case of a catastrophic event; to stabilise loss experience; to dually protect themselves and the insured against catastrophes; and to increase capacity.
What is a retrocession in insurance?
Retrocession — a transaction in which a reinsurer transfers risks it has reinsured to another reinsurer.
How do Layers work in insurance?
Layering — the building of a program of insurance coverage using the excess of loss approach. Layered programs involve a series of insurers writing coverage, each one in excess of lower limits written by other insurers.
How do insurance companies use a bordereau?
An insurance company will use a bordereau to provide detailed information on the different risks that a reinsurer has accepted. The purpose of reinsurance is to alleviate some of the risks associated with insuring assets of very high value.
What is a term bordereau?
Term Bordereau Definition Bordereau — a report providing premium or loss data with respect to identified specific risks. This report is periodically furnished to a reinsurer by the ceding insurers or reinsurers. Related Products Risk Financing
What is a premium bordereau?
A premium bordereau lists all of the items that are protected under the reinsurance contract, including the contact information of the insured, the amount of the risk, the time period of reinsurance coverage, and the critical dates associated with the primary insurance.
What is the difference between a bordereau and a reinsurance report?
The bordereau will contain either all of the items protected under the contract or a detailed record of how many claims have been made for that risk in a particular period. Meanwhile, the reinsurer audits the report to inform its future decisions, such as knowing what risks should be reinsured based on profitability.
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