Major loss

Loss which has a special significance for the direct insurer or reinsurer due to the amount involved; it is defined as a major loss in accordance with a fixed loss amount or other criteria (in the case of Hannover Re more than EUR 10 million gross).

Major loss budget

Modelled loss expectancy for the business with natural perils exposure with respect to net losses larger than EUR 10 million plus the average of the past 10 years for man-made net losses larger than EUR 10 million.

Mark-to-market valuation

The evaluation of financial instruments to reflect current market value or fair value.

Matching currency cover

Coverage of technical liabilities in foreign currencies by means of corresponding investments in the same currency in order to avoid exchange-rate risks.

Microinsurance

Microinsurances offer low-income population groups - especially in developing countries - protection against fundamental risks associated with, inter alia, health, disability, the consequences of natural disasters or unexpected crop failures.

Modified Coinsurance- (ModCo) Treaty

Type of reinsurance treaty where the ceding company retains the assets with respect to all the policies reinsured and also establishes and retains the total reserves on the policies, thereby creating an obligation to render payments to the reinsurer at a later date. Such payments include a proportional share of the gross premium plus a return on the assets.

Morbidity risk

In general terms, the actuarial risk that a person receiving health, disability or long-term-care benefits triggered by illness, malfunctioning of body parts, injury or frailty experiences a higher or longer than expected morbidity or disability leading to a higher payment amount, higher frequency or longer duration.

Mortality risk

In general terms, the actuarial risk that a person upon whose death a benefit is payable lives shorter than expected. From a (re)insurer’s perspective, this is the risk that the observed mortality experience in an underlying portfolio deviates from what had previously been calculated on the basis of actuarial assumptions.