Reinsurance in Risk Financing Training

Objectives:
• Understand the fundamental concepts of reinsurance and risk financing.
• Identify the key players and their roles in the reinsurance market.
• Differentiate between types of risk and risk transfer mechanisms.
• Explain the purpose and benefits of reinsurance for insurers.

Topics:
• Definition and purpose of reinsurance
• Risk financing concepts and risk transfer
• Key participants: cedent, reinsurer, broker
• Types of risk: underwriting, credit, operational
• Overview of the reinsurance market structure
• Benefits of reinsurance: capacity, stability, capital relief
• Introduction to regulatory environment
• Case study: Risk financing needs of a primary insurer

Objectives:
• Distinguish between proportional and non-proportional reinsurance.
• Describe quota share, surplus share, and excess of loss treaties.
• Explain the mechanics of facultative vs. treaty reinsurance.
• Analyze the suitability of different structures for various risks.

Topics:
• Proportional reinsurance: quota share and surplus share
• Non-proportional reinsurance: excess of loss (per risk, per event, aggregate)
• Facultative reinsurance: features and applications
• Treaty reinsurance: features and applications
• Comparison of structures: advantages and disadvantages
• Clauses typical in reinsurance treaties
• Case study: Selecting a structure for a property portfolio
• Exercises on calculating cessions and retentions

Objectives:
• Understand the principles of reinsurance pricing.
• Calculate premiums for proportional and non-proportional treaties.
• Explain the role of underwriting information in reinsurance.
• Assess factors influencing reinsurance rates.

Topics:
• Pricing fundamentals: exposure, experience, risk load
• Premium calculation for quota share and surplus share
• Premium calculation for excess of loss: burning cost, exposure rating
• Reinsurance underwriting process
• Data requirements: loss triangles, exposure data
• Factors affecting pricing: catastrophe modeling, market cycles
• Commission structures and profit commissions
• Practical exercise: Pricing a simple excess of loss treaty

Objectives:
• Identify key components of a reinsurance contract.
• Understand standard clauses and their implications.
• Explain the legal framework governing reinsurance.
• Analyze the role of brokers in contract placement.

Topics:
• Structure of a reinsurance treaty: slip, schedule, clauses
• Key clauses: follow the fortunes, arbitration, insolvency
• Warranties and conditions
• Reinsurance and insurance law: utmost good faith, indemnity
• Regulatory requirements in South Africa (FSB, SARB)
• Role of reinsurance brokers: placement, negotiation, administration
• Contract wording and interpretation
• Case study: Dispute resolution in a reinsurance contract

Objectives:
• Develop risk financing strategies using reinsurance.
• Evaluate alternative risk transfer (ART) mechanisms.
• Understand the role of captives and insurance-linked securities.
• Integrate reinsurance into enterprise risk management (ERM).

Topics:
• Risk financing spectrum: retention, transfer, hybrid
• Alternative risk transfer: finite reinsurance, multi-year products
• Captive insurance companies: structure and benefits
• Insurance-linked securities: catastrophe bonds, sidecars
• Reinsurance in ERM: capital management, solvency
• Optimizing reinsurance programs: net retention, diversification
• Case study: Designing a risk financing program for a large insurer
• Group exercise: Building a reinsurance program

Objectives:
• Understand the claims process in reinsurance.
• Calculate recoverables under different treaty types.
• Explain the role of claims data in risk assessment.
• Manage disputes and recoveries effectively.

Topics:
• Claims notification and reporting procedures
• Recoverable calculation: proportional vs. non-proportional
• Claims reserving and IBNR estimation
• Reinsurance recoverables as assets
• Dispute resolution: arbitration, litigation
• Case study: Complex claim recovery under an excess of loss treaty
• Practical exercise: Calculating recoverables from loss data
• Best practices in claims management

Objectives:
• Analyze current trends and challenges in the reinsurance market.
• Understand the impact of regulation (Solvency II, IFRS 17).
• Evaluate emerging risks and innovation in reinsurance.
• Synthesize course content to apply in professional context.

Topics:
• Global reinsurance market overview and cycles
• Impact of Solvency II and IFRS 17 on reinsurance
• Regulatory developments in South Africa
• Emerging risks: cyber, climate change, pandemic
• Innovation: insurtech, blockchain, parametric triggers
• Reinsurance and sustainable finance
• Final group project: Present a reinsurance program
• Course review and assessment