Single Reinsurance Approach to Insurance Products
All four Insurance modules offer the option to model a single reinsurance arrangement using the Single Reinsurance section of the Cell Assumptions screen. AXIS now offers a more powerful option of modeling multiple reinsurance arrangements (see description below).
The Single Reinsurance approach typically supports various types of YRT and Coinsurance arrangements, with the option to define the reinsurance premiums, allowances, ceded face amount patterns and other elements of ceded cash cashflows independently from the direct product feature counterparts. Other benefits may also be reinsured as part of coinsurance arrangements.
While reserve calculations will take account of the defined Reinsurance arrangements, the approach to the ceded reserve credit varies according to the specific reserve method and whether the Reinsurance method is a YRT or Coinsurance Method. The Canadian PPM method takes all cash flows explicitly into account, regardless of reinsurance method, and supports exact mean reserves. Net Premium methods generally apply a "proportional" approach to the ceded credit for coinsurance arrangements, and allow various unearned premium approaches to the ceded credit for YRT arrangements.
The Single Reinsurance approach defines the proportion reinsured using a combination of the Face amounts per unit and a Multiple modifier associated with that Table. For seriatim modeling, Single Reinsurance arrangements defined in the Cell will continue to apply but you may specify the amount reinsured record by record if that information is available from source data. You may also override other Single Reinsurance assumptions defined in the Cell.
Multiple Reinsurance Approach to Insurance Products
New Multiple Reinsurance functionality introduced in AXIS 11.2 and 11.3 now permits the simultaneous modeling of multiple reinsurance arrangements in one cell for all four insurance modules. It will also support:
Each reinsurance arrangement in the Multiple Reinsurance approach is defined in a separate object, called the Reinsurance Terms object, up to five of which may selected at once in the Multiple Reinsurance Section of the Cell Assumption screen. The approach to defining a reinsurance arrangement in the Reinsurance Terms is very similar to using the Single Reinsurance section of the Cell, but there are some minor differences.
Each Reinsurance Terms object defines the financial terms of one reinsurance deal as it applies to a specific plan/rate class combination. All Reinsurance Terms reflecting a single contractual arrangement with one reinsurer, will be assigned to a Reinsurance Treaty object for purposes of reporting, and for aggregation of the ceded cashflows at higher levels.
In seriatim processing, multiple source records are used to define the reinsurance cessions inforce for each policy, each of which will link to a different Reinsurance Terms object to specify the financial arrangements of the reinsurance. You may model any number of cessions per policy, as the Reinsurance Terms linked to the Cell, if any, are normally ignored.
Further details of the Multiple Reinsurance Approach are provided in the topic Overview of Multiple Reinsurance.
Multiple Reinsurance Approach to Annuity Products
While no conventional (proportional) reinsurance features are currently available in the Annuity module, new features are being introduced to support the reinsurance on an aggregate (portfolio) basis of guaranteed death benefits and annuitization benefits arising from the accumulation phase of annuities. Reinsurance Terms objects define the elements of policy based cashflows that are accumulated by Reinsurance Treaty and used in Subfund level calculations as defined by the Treaty object.
Since the Multiple Reinsurance of Annuities is currently under Feature Code control, please contact GGY directly for further information on this option.