Innovative instruments for transferring reinsurance business to the capital markets with the goal of refinancing or placing insurance risks.
Presentation of items from the annual financial statements separated according to functional criteria such as segments and regions.
Unintended coverage of cyber-related losses in traditional reinsurance treaties.
Socially Responsible Investing (SRI)
Socially Responsible Investing is a term describing an investment strategy which seeks to maximise both financial return and social good.
European directive for the insurance industry. The new European regulatory regime for (re)insurers that entered into force on 1 January 2016 on the basis of the Solvency II Directive (Directive 2009/138/EC) is comprised of risk-based capital requirements and imposes quantitative, qualitative and reporting-related requirements in three main areas known as pillars.
Solvency capital ratio (SCR)
Percentage coverage of the supervisory capital requirement (target solvency capital) under Solvency II by eligible own funds.
Special Purpose Entity (SPE)
Legal structure with specific characteristics not bound to a certain form of organisation used to conduct defined activities or to hold assets.
Spread loss treaty
Treaty between an insurer and a reinsurer that covers risks of a defined portfolio over a multi-year period.
Static volatility adjustment
A volatility adjustment – in this case in its static form – is intended to prevent increased volatility on capital markets being reflected in the valuation of long-term insurance guarantees.
Reinsurance with limited potential for profits and losses. In most cases customers strive for risk equalisation over time or solvency relief, both of which have a stabilising effect on the ceding company's balance sheet.
Form of proportional reinsurance under which the risk is not spread between the insurer and reinsurer on the basis of a previously agreed, set quota share. Instead, the insurer determines a maximum sum insured per risk up to which it is prepared to be liable. Risks that exceed the ceding company's retention (surpluses) are borne by the reinsurer. The reinsurer's lines thus vary according to the level of the retention and the sum insured of the reinsured contract. The reinsurer's liability is generally limited to a multiple of the ceding company's retention.
Surplus relief treaty
Reinsurance contract under which an admitted reinsurer assumes (part of) a ceding company’s portfolio to relieve stress on the cedant’s policyholders’ surplus.
Ratio of loss reserves to paid losses under a specific contract or several contracts in a balance sheet year.