What is direct coinsurer in SAP FS-PM - Policy Management?

SAP Term: direct coinsurer

• Component: FS-PM

• Component Name: Policy Management

• Description: Participation type in coinsurance. The direct coinsurers are named for the policyholder they are listed on the insurance policy and are directly liable for the policyholder. These insurance companies normally pay leading insurer commission to the leading insurance company.

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• Key Concepts: 
  Direct coinsurer is a term used in SAP FS-PM Policy Management. It refers to a type of insurance policy where two or more insurers share the risk of a single policyholder. The insurers are jointly and severally liable for the policyholder’s losses, meaning that each insurer is responsible for the full amount of the claim. 
  
  How to use it: 
  Direct coinsurers can be used to reduce the risk of a single insurer taking on too much risk. By sharing the risk with other insurers, the overall risk is spread out and each insurer’s exposure is limited. This type of policy can also be beneficial for policyholders, as they may be able to get better coverage at a lower cost than if they were to purchase a single policy from one insurer. 
  
  Tips & Tricks: 
  When setting up a direct coinsurer policy, it is important to ensure that all parties involved are aware of their responsibilities and liabilities. It is also important to make sure that all parties are adequately insured and that the terms of the policy are clearly defined. 
  
  Related Information: 
  Direct coinsurer policies are similar to reinsurance policies, where one insurer takes on the risk of another insurer. However, in reinsurance policies, the reinsurer is not jointly and severally liable for the losses of the original insurer.