--- title: šŸ¤ How to define the appropriate reinsurance structure for your coverage needs description: "šŸ¤ How to define the appropriate reinsurance structure for your coverage needs\n\nšŸ“Œ These tutorials will offer you all the basics you need to master reinsurance." image: https://blog.arundore.com/hubfs/Vignette_YT_ep10%20EN.jpg --- [![Arundo_Logo_RVB-1](https://blog.arundore.com/hs-fs/hubfs/Arundo_Logo_RVB-1.png?width=115&height=76&name=Arundo_Logo_RVB-1.png)](https://www.ccr-re.com/en/home) - [News](https://blog.arundore.com/en) - [Reinsurance Tutorials](https://info.arundore.com/reinsurance-tutorials) - [Women of Power](https://info.arundore.com/women-of-power) - [MTPL Losses France Study](https://info.arundore.com/assessing-the-losses-of-severe-personal-injury-victims-in-motor-liability-cases) - [Arundo Re Talks](https://www.arundore.com/en/arundo-re-talks) - [franƧais-FRANCE](https://blog.arundore.com/fr/comment-dĆ©finir-la-structure-de-rĆ©assurance-appropriĆ©e-Ć -vos-besoins-en-couverture) [Home](https://blog.arundore.com/) [The reinsurance and insurance blog of Arundo Re](https://blog.arundore.com/en) šŸ¤ How to define the appropriate reinsurance structure for your coverage needs 5 February 2024 2 min read # šŸ¤ How to define the appropriate reinsurance structure for your coverage needs ## Reinsurance Tutorials #10 - Season 3 Hi everybody šŸ‘‹ Ā  Today, and for the tenth Reinsurance Tutorials video of the season, we will talk about "How to define the appropriate reinsurance structure for your coverage needs" Ā  This subject will be addressed by CCR Re experts Perrine Carolo and Bertrand Petras. Ā  Letā€™s start!Ā ā¬ Ā  **\[Perrine Carolo\] :** Hello I am Perrine Carolo, Underwriter & Actuary - Life & Health in France and Europe. And today I stand with Bertrand. Ā  **\[Bertrand Petras\] :** Hi Perrine, Hello everybody, I am Betrand Petras, Vice President Life & Health Middle East/North Africa. Today we will see how to define the appropriate reinsurance structure for your coverage needs. Ā  **\[Perrine\] :** Letā€™s start right away. Ā  **\[Perrine\] :** The choice of the reinsurance structure may vary according to **strategy,** underwriting philosophy and risk appetite of the insurance company, to **suit** its needs. The reinsurerā€™s financial strength can also determine the most relevant choice. The choice of reinsurance structure may depend on the portfolio profile correlated to the type and nature of risks covered (frequency, severity, peak risk, unique, Cat Nat, mutualized or notā€¦). Ā  **\[Bertrand\] :** You will choose a Proportional structure to: Ā  - Provide stable **cash flow** to cedants since the reinsurer shares the risk and premium according to a fixed ratio. - but also **reduce volatility** in the cedantā€™s results and make its forecasts easier as the cedant agrees to share premium and losses in a predetermined proportion. - And finally support the development of **new products** on which the insurer would have limited experience. The risk is shared with the reinsurer, who can provide its market experience in the determination of premiums and services. Ā  **\[Bertrand\] :** In a proportional structure, capital requirement is lower than in non-proportional ones, then companies can then dedicate that capital to other projects. Ā  The cedant can also benefit from the proportional structure by improving its **risk management** as part of the risk is transferred to reinsurers. For example, it can also help to better manage the cedantā€™s exposure to catastrophic events or high risks. Proportional structures also bring an additional level of **expertise** to cedants by helping them to better manage their risk exposure and improve their underwriting practices. Ā  Additionally, it could help cedants to reduce overall exposure to a single type of risk. Ā  Proportional reinsurance agreements could be **less expensive** than other types of reinsurance because cedants might retain a bigger proportion of the risks in particular for those with limited financial resources. Ā  It also provides the cedants with additional capacity to **underwrite** more business and take on larger risks. Ā  **\[Perrine\] :** You will choose a **non-Proportional structure** to: Ā  - Prevent exceptional risks that could have a financial impact on the company. - but also to manage specific, atypical or unique risks as they are difficult to evaluate. - And finally to diversify an existing book of business on segment lines that are not currently covered or negligible in the in force portfolio. Ā  **\[Perrine\] : On the other hand, the advantages of a non proportional structure are:** - To keep control on Reinsurance costs. The cost is known in advance and might vary, within predetermined limits. - Another advantage is to enable the company to cover risks regardless of the insurance premium. - And finally to provide better monitoring of the results over time. Ā  Ā  **\[Perrine\] :** A good example is the Epidemic & pandemic risks: by choosing a non-proportional reinsurance structure (after having carefully determined the capacity or action level at which the Company is involved) the company could set in advance the maximum exposure that is acceptable, and then get a good idea of the costs incurred.Ā Ā  Ā  **\[Bertrand\] :** Thanks a lot for watching this video. Ā  **\[Perrine\] :** Now, you know how to define the appropriate reinsurance structure for your coverage **needs. \[Betrand\] :** Thanks again, and goodbye. Ā Ā Ā Ā  Ā  Ā  Bye for now šŸ‘‹ **[![ See all videos ](https://no-cache.hubspot.com/cta/default/6458234/8fb8cd40-e31d-4fca-96fd-7452394cd208.png)](https://cta-redirect.hubspot.com/cta/redirect/6458234/8fb8cd40-e31d-4fca-96fd-7452394cd208)** Ā  --- ## šŸ“ŗ More episodes are coming... 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