Reinsurance interview questions

Treaty and facultative arrangements, cession, bordereaux, and how risk transfer shows up in systems.

3 questions in Insurance.

Insurance Domain Knowledge for EngineersA 19-minute read on how the topic fits together, before the questions.Insurance domain fundamentals58 short answers on one page, for revising rather than studying.

hard3

hardScenarioCase Study

A windstorm produces four thousand claims across three days. How does your system decide that is one event for reinsurance purposes, and what turns on the answer?

The treaty defines the occurrence, usually as losses from one peril falling inside a stated window of consecutive hours, and the cedant chooses where that window starts. Grouping the claims one way reaches a higher layer once; grouping them another way pierces the retention twice, so the aggregation is a financial decision resting on loss timestamps.

6 minsenior, staff, lead

hardConceptDesign

A claim payment goes out. How does your system work out how much of it a reinsurer owes, and what does that require you to have kept?

Cession allocates each payment across the treaties covering the policy, and which treaties those are depends on when the policy was written rather than when the claim happened. So a payment must stay sliceable by treaty, layer, accident date and underwriting year long after the file closed.

5 minsenior, staff

hardConceptDesign

What is the difference between treaty and facultative reinsurance, and where does cession show up in the systems you build?

Treaty reinsurance covers a class of business automatically, while facultative reinsurance covers one named risk by negotiation. Systems must calculate cession from the right treaty version and store gross, ceded and net transactions for audit.

6 minmid, senior, staff