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{{Main Page/random quote}} |
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== biz/books == |
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''' |
'''Did you know?''' |
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__NOCACHE__ |
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[[sales & marketing]] {{!}} |
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{{#switch: {{#expr: {{CURRENTTIMESTAMP}} mod 100}} |
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[[products]] {{!}} |
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| 0 = {{:Definition:Bordereaux}} |
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[[strategy]] {{!}} |
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| 1 = {{:Definition:Burning cost}} |
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| 2 = {{:Definition:Commutation (reinsurance)}} |
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'''career ▸''' {{!}} |
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| 3 = {{:Definition:Finite reinsurance}} |
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[[leadership]] {{!}} |
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| 4 = {{:Definition:Fronting}} |
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[[presentation]] {{!}} |
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| 5 = {{:Definition:Follow-the-fortunes}} |
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{{Inline expand | productivity ▸|{{read|[[Atomic Habits]]}} {{read|[[The 7 Habits of Highly Effective People]]}} {{read|[[The Power of Habit]]}} {{read|[[see all ▸]]}}}} {{!}} |
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| 6 = {{:Definition:Cut-through clause}} |
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[[writing]] {{!}} |
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| 7 = {{:Definition:Binding authority}} |
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| 8 = {{:Definition:Clash cover}} |
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'''investing ▸''' {{!}} [[value]] {{!}} [[growth]] |
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| 9 = {{:Definition:Attachment point}} |
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| 10 = {{:Definition:Exhaustion point}} |
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<!-- {{Main Page/biz/books}} --> |
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| 11 = {{:Definition:Reinstatement premium}} |
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{{Section separator}} |
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| 12 = {{:Definition:Sliding-scale commission}} |
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| 13 = {{:Definition:Profit commission}} |
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== biz/people == |
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| 14 = {{:Definition:Loss portfolio transfer}} |
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'''CEOs ▸''' {{!}} |
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| 15 = {{:Definition:Adverse development cover (ADC)}} |
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[[CEOs of DJIA companies|DOW 30]] {{!}} |
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| 16 = {{:Definition:Aggregate excess-of-loss reinsurance}} |
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[[CEOs of Nasdaq-100 companies|Nasdaq-100]] {{!}} |
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| 17 = {{:Definition:Catastrophe excess-of-loss reinsurance}} |
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[[CEOs of FTSE 100 companies|FTSE 100]] {{!}} |
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| 18 = {{:Definition:Per-risk excess of loss reinsurance}} |
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[[CEOs of DAX companies|DAX 40]] {{!}} |
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| 19 = {{:Definition:Risks-attaching basis}} |
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[[CEOs of CAC 40 companies|CAC 40]] {{!}} |
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| 20 = {{:Definition:Losses-occurring basis}} |
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[[CEOs of EURO STOXX 50 companies|EURO STOXX 50]] {{!}} |
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| 21 = {{:Definition:Claims-made trigger}} |
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[[CEOs of SMI companies|SMI]] {{!}} |
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| 22 = {{:Definition:Signing down}} |
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[[CEOs of S&P/TSX 60 companies|S&P/TSX 60]] {{!}} |
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| 23 = {{:Definition:Sunset clause}} |
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[[CEOs of NIFTY 50 companies|NIFTY 50]] {{!}} |
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| 24 = {{:Definition:Utmost good faith}} |
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[[CEOs of HSI companies|HSI]] {{!}} |
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| 25 = {{:Definition:Contra proferentem}} |
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| 26 = {{:Definition:Incurred but not reported (IBNR)}} |
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'''quotes ▸''' {{!}} |
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| 27 = {{:Definition:Bornhuetter-Ferguson method}} |
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{{Inline expand |business ▸|{{read|[[Notable quotes about accounting| accounting]]}} {{read|[[Notable quotes about advertising | advertising]]}} {{read|[[Notable quotes about customers | customers]]}} {{read|[[Notable quotes about employees|employees]]}} {{read|[[Notable quotes about marketing|marketing]]}} {{read|[[Notable quotes about sales|sales]]}} {{read|[[Notable quotes about strategy|strategy]]}} {{read|[[see all ▸]]}} }} {{!}} |
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| 28 = {{:Definition:Chain-ladder method}} |
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{{Inline expand |career ▸{{read|[[leadership]]}} {{read|[[productivity]]}} }} {{!}} |
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| 29 = {{:Definition:Stochastic reserving}} |
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{{Inline expand |investing ▸ | {{read|[[value]]}} {{read|[[growth]]}} }} {{!}} |
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| 30 = {{:Definition:Loss development triangle}} |
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| 31 = {{:Definition:Credibility factor}} |
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| 32 = {{:Definition:Allocated loss adjustment expense (ALAE)}} |
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| 33 = {{:Definition:Unallocated loss adjustment expense (ULAE)}} |
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| 34 = {{:Definition:Experience modification factor}} |
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| 35 = {{:Definition:Industry loss warranty (ILW)}} |
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| 36 = {{:Definition:Sidecar (reinsurance)}} |
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| 37 = {{:Definition:Collateralized reinsurance}} |
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| 38 = {{:Definition:Catastrophe bond (CAT bond)}} |
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| 39 = {{:Definition:Retrocession}} |
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| 40 = {{:Definition:Surplus share reinsurance}} |
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| 41 = {{:Definition:Surplus strain}} |
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| 42 = {{:Definition:Surplus relief}} |
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| 43 = {{:Definition:Funds withheld reinsurance}} |
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| 44 = {{:Definition:Modified coinsurance}} |
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| 45 = {{:Definition:Coinsurance penalty}} |
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| 46 = {{:Definition:Anti-concurrent causation clause}} |
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| 47 = {{:Definition:Continuous trigger}} |
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| 48 = {{:Definition:Efficient proximate cause}} |
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| 49 = {{:Definition:Horizontal exhaustion}} |
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| 50 = {{:Definition:Vertical exhaustion}} |
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| 51 = {{:Definition:Sue and labor clause}} |
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| 52 = {{:Definition:Honorable engagement clause}} |
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| 53 = {{:Definition:Hours clause}} |
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| 54 = {{:Definition:Batch clause}} |
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| 55 = {{:Definition:Aggregation clause}} |
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| 56 = {{:Definition:Omnibus clause}} |
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| 57 = {{:Definition:Running down clause}} |
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| 58 = {{:Definition:Warehouse-to-warehouse clause}} |
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| 59 = {{:Definition:General average}} |
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| 60 = {{:Definition:Particular average}} |
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| 61 = {{:Definition:Constructive total loss}} |
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| 62 = {{:Definition:York-Antwerp Rules}} |
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| 63 = {{:Definition:Protection and indemnity (P&I)}} |
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| 64 = {{:Definition:Demand surge}} |
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| 65 = {{:Definition:Social inflation}} |
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| 66 = {{:Definition:Nuclear verdict}} |
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| 67 = {{:Definition:Silent cyber}} |
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| 68 = {{:Definition:Affirmative cyber coverage}} |
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| 69 = {{:Definition:Parametric insurance}} |
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| 70 = {{:Definition:Embedded insurance}} |
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| 71 = {{:Definition:Takaful}} |
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| 72 = {{:Definition:Bancassurance}} |
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| 73 = {{:Definition:Microinsurance}} |
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| 74 = {{:Definition:Captive insurance company}} |
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| 75 = {{:Definition:Cell captive}} |
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| 76 = {{:Definition:Protected cell company (PCC)}} |
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| 77 = {{:Definition:Reciprocal insurance exchange}} |
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| 78 = {{:Definition:Risk retention group (RRG)}} |
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| 79 = {{:Definition:Lloyd's syndicate}} |
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| 80 = {{:Definition:Reinsurance to close (RITC)}} |
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| 81 = {{:Definition:Equitas}} |
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| 82 = {{:Definition:Funds at Lloyd's (FAL)}} |
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| 83 = {{:Definition:Syndicate-in-a-box (SIAB)}} |
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| 84 = {{:Definition:Part VII transfer}} |
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| 85 = {{:Definition:Solvent scheme of arrangement}} |
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| 86 = {{:Definition:Run-off (insurance)}} |
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| 87 = {{:Definition:Demutualization}} |
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| 88 = {{:Definition:Depopulation program}} |
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| 89 = {{:Definition:Probable maximum loss (PML)}} |
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| 90 = {{:Definition:Exceedance probability curve (EP curve)}} |
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| 91 = {{:Definition:Realistic disaster scenario (RDS)}} |
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| 92 = {{:Definition:Monte Carlo simulation}} |
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| 93 = {{:Definition:Copula}} |
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| 94 = {{:Definition:Bühlmann model}} |
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| 95 = {{:Definition:Cape Cod method}} |
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| 96 = {{:Definition:Extra-contractual obligation (ECO)}} |
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| 97 = {{:Definition:Loss in excess of policy limits (XPL)}} |
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| 98 = {{:Definition:Doctrine of reasonable expectations}} |
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| 99 = {{:Definition:Longevity swap}} |
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}} |
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Latest revision as of 22:46, 12 March 2026
Did you know?
🔄 Commutation (reinsurance) is the process by which a ceding company and a reinsurer agree to terminate all or part of an existing reinsurance contract, settling outstanding obligations through a lump-sum payment rather than allowing claims to run off over time. In essence, the parties accelerate the financial resolution of a book of business, extinguishing future liabilities and receivables in a single transaction.
💰 The mechanics typically begin with an actuarial analysis of the remaining loss reserves and IBNR exposure under the contract. Both parties — often through independent actuaries — arrive at a present-value estimate of what the reinsurer would ultimately owe if the contract were left to run off naturally. Negotiations then determine the commutation price, which reflects each side's view of reserve adequacy, investment income on held reserves, and the uncertainty discount one party is willing to accept to achieve finality. Once agreed, the commutation agreement is executed, the settlement is paid, and the reinsurer is released from any further obligation under the commuted portion.
📈 Commutations serve a range of strategic purposes across the reinsurance market. A reinsurer looking to exit a line of business or reduce exposure to long-tail liabilities — such as asbestos and environmental claims — may actively seek commutations to clean up its balance sheet. Ceding companies, meanwhile, may commute contracts when they question a reinsurer's long-term creditworthiness or when they want to simplify their reinsurance recoverables. For both parties, commutations convert uncertain future cash flows into a known quantity, improving financial clarity — though the trade-off is that one side inevitably gives up some potential upside if actual losses develop differently than projected.
Related concepts: