Instead of stop-loss reinsurance, the insurer is evaluating changing to coinsurance, whereby it will pay a portion of the losses and transfer the rest to the reinsurer. If the insurer keeps 75% of losses, is coinsurance preferable to stop-loss?

For which level of coinsurance will the insurer be indifferent between stop-loss and coinsurance?

Answer rating: 100% (QA)

To evaluate whether coinsurance with a 75 retention is preferable to stoploss reinsurance we need to ... View the full answer