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INSURER OWNERSHIP, FINANCIAL & OPERATIONAL STRUCTURE (INSURER CAPITAL,…

- - - - can lead to lower or high return
    - - Insurer has to pay tax twice on return
    - - Insurer claim cost high unexpected return
    - - Insurer might have greater agency cost
    - - pricing received less than true value of shares
- - - - Reduce exposure to very high claims
      - Diversification
    - - Excess
        
        pays if threshold
        
        exceed threshold during period
        
        claim cost from single policy
        
        total claim cost arise from single event exceed
      - Treaty
        
        nature of the transaction that covers multiple policies written by ceding insurer
      - Propotional
        
        contract require re-insurer to pay commission to buyer
        
        as compensation
      - Facultative
        
        evaluate each risk
        
        cede & decide weather to accept it on case by case basis