REINSURANCE BY SOUTH AFRICAN SHORT-TERM INSURERS

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Abstract

Short-term insurers utilize mutually loss sharing by obtaining cover for their risk portfolios by ceding a part thereof to a professional reinsurer, who pools the risks of various insurers. This study, which has the improvement of financial decision-making by short-term insurers pertaining reinsurance as its objective, focuses on the reasons why short-term insurers obtain reinsurance. The various methods/contracts of reinsurance, as well as the forms/bases of reinsurance which are employed by short-term insurers, represent main sections of this research. The factors which determine the retention level of a short-term insurer also receive the necessary attention. This study may serve as an illustration to other developing countries with emerging economies as the empirical study focuses on the market leaders of the General Segment of the South African short-term insurance industry.

Keywords: Forms / Bases of Reinsurance, Methods / Contracts of Reinsurance, Mutually Loss Sharing, Need for and uses of Reinsurance, Non-proportional Reinsurance, Proportional Reinsurance, Retention Level of Short-Term Insurers

How to cite this paper: du Plessis, M., Mostert, F. J., Mostert, J. H. (2010). Reinsurance by South African short-term insurers. Corporate Ownership & Control, 7(3-1), 210-218. https://doi.org/10.22495/cocv7i3c1p5