Reinsurance premium is earned throughout the term of a deal, with little earned on day one.
Expected loss is modeled for each deal by the perils and regions covered, and loss seasonality is estimated for each deal weighted by its contribution to expected loss.
Certain perils, such as earthquake and man-made perils, have a uniform distribution across the calendar year, while others are seasonal.
For many of OnRe's hurricane-exposed deals, exposure sits at a level where a major hurricane would be needed to cause a loss. Historically, the seasonality of major hurricanes (Category 3 and above) has followed a different pattern from that of all hurricanes.
Aggregate and subsequent-event deals require multiple events to trigger a loss, resulting in a delayed seasonality pattern. Claims development, delayed reporting, and potential capital trapping are also factored into the assessment of earnings.
Premium earning accelerates through periods of higher loss seasonality and culminates upon the release of liability and funds from the deal trust account.
At a portfolio level, the different earnings patterns and inception dates of each deal contribute to a more balanced earnings profile.
Expected loss is modeled for each deal by the perils and regions covered, and loss seasonality is estimated for each deal weighted by its contribution to expected loss.
Certain perils, such as earthquake and man-made perils, have a uniform distribution across the calendar year, while others are seasonal.
For many of OnRe's hurricane-exposed deals, exposure sits at a level where a major hurricane would be needed to cause a loss. Historically, the seasonality of major hurricanes (Category 3 and above) has followed a different pattern from that of all hurricanes.
Aggregate and subsequent-event deals require multiple events to trigger a loss, resulting in a delayed seasonality pattern. Claims development, delayed reporting, and potential capital trapping are also factored into the assessment of earnings.
Premium earning accelerates through periods of higher loss seasonality and culminates upon the release of liability and funds from the deal trust account.
At a portfolio level, the different earnings patterns and inception dates of each deal contribute to a more balanced earnings profile.
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