Question
A form of reinsurance that indemnifies the ceding
company for the accumulation of losses in excess of a stipulated sum arising from a single catastrophic event or series of events is termed as?Solution
Catastrophe reinsurance is purchased by an insurance company to reduce its exposure to the financial risks associated with a catastrophic event occurring. Catastrophe reinsurance allows the insurer to shift some or all of the risk associated with policies that it underwrites in exchange for a portion of the premiums that it receives from policyholders.
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