Excess for the year
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An annual excess loss (English: Stop Loss ) is a form of non-proportional reinsurance .
The reinsurer has to pay if the total loss burden of the cedant from an industry or line of business during a contract period exceeds the earned premium by an agreed percentage (loss ratio).
The aim of this type of contract is to limit the cedant's losses (planning security). It is not individual policies or claims that are protected, but the overall result. Stop Loss protects the balance sheet.
See also
Web links
- Karl Michael Ortmann: Practical life insurance mathematics: With numerous examples, images and applications Vieweg + Teubner 2009, p. 286
- Werner Schwilling: Forms and effects of (compulsory) property / casualty reinsurance - an introduction 2018