What Are Your Options to Reinsure Your Umbrella Business?

Which is best for you?

Reinsurance Options to Transfer your Umbrella Policy Exposure

Ask yourself the following questions when determining the structure for

your Umbrella exposure…

? ? ?

Based on your answers, should you have a per policy or per occurrence umbrella treaty?

Per Policy Reinsurance Umbrella Treaty

Reflects the unique characteristics of Umbrella risks.

The retention, limit and rate are not affected by other Casualty business.

More flexibility and choices of structure Allow you to keep or cede more exposure and premium depending on

profitability of business and corporate risk appetite.

Benefits of a Per Policy Umbrella Treaty

Umbrella Loss severity and volatility are contained within the separate umbrella treaty, thereby not impacting

reinsurance terms on other casualty lines of business.

Benefits of a Per Policy Umbrella Treaty

The reinsurance occurrence limit reflects the umbrella policy limit, eliminating

the risk of breaching treaty aggregate limits.

Benefits of a Per Policy Umbrella Treaty

The occurrence definition within the Umbrella treaty is aligned with policy language, possibly leading to

broader coverage and more recovery.

Benefits of a Per Policy Umbrella Treaty

Reinsurance Premiums tend to be more predictable and stable as they are based on

expected umbrella loss over time.

Benefits of a Per Policy Umbrella Treaty

Combines a variety of insurance products and applies a common set of terms.

Reinsurance occurrence limits and retentions are shared among all products offered by the company.

Per Occurrence Reinsurance Umbrella Treaty

One set of coverage terms and a single retention across all lines of business affords administrative ease in

underwriting, accounting and claims.

Benefits of a Per Occurrence Umbrella Treaty

The stability of knowing the maximum retained loss for any one occurrence (e.g., clash protection)

Benefits of a Per Occurrence Umbrella Treaty

Depending on your umbrella experience, pricing all lines collectively may result in

an upfront umbrella discount net of ceding commission.

Benefits of a Per Occurrence Umbrella Treaty

A claim involving both a primary and umbrella policy could involve less coverage friction

as a single retention is applied to the entire loss.

Benefits of a Per Occurrence Umbrella Treaty

Large regional carriers with casualty retentions equal to or higher than their primary GL or Property product limits

might find this structure of particular value.

Benefits of a Per Occurrence Umbrella Treaty

Comparison

Exposure Based Price

Discounted Price

tailored “all-in-one”

more predictability

Greater volatility

More product support Ease and

consistency

No one option is always cheaper, easier, better-suited or predictable.

The specifics will depend on your book of business and the appetite you have to take risk.

We hope this overview is helpful in thinking through Umbrella reinsurance alternatives.

© 2014 General Re Corporation | This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.

Contact our Umbrella Treaty Team for more information:

brooke_cote@genre.com e

+1 203 328 6149 p

Brooke Cote

EKramer@genre.com e

+1 203 328 5778 p

Elizabeth Kramer Umbrella Business Development

mslowin@genre.com e

+1 312 526 7546 p

Maria Slowinski Umbrella Specialist

scarr@genre.com e

+1 860 520 7669 p

Steve Carr

bmonahan@genre.com e

+1 614 222 3802 p

Brian Monahan

cniemeie@genre.com e

+1 614 222 3844 p

Colin Niemeier

Umbrella Specialist

Umbrella Specialist Umbrella Specialist Treaty Mkt. Strategy & Business Dev.