What is annual loss limit in SAP FS-RI - Reinsurance?

SAP Term: annual loss limit

• Component: FS-RI

• Component Name: Reinsurance

• Description: The maximum amount that is paid by a non-proportional treaty for losses within a treaty period. This limit supplements the information provided by the number of reinstatements. This limit is usually a multiple of the agreed liability. Unlike the rules that apply to reinstatements, there is no other premium due in addition to the agreed premium.

Smart SAP Assistant

• Key Concepts: 
  Annual Loss Limit is a feature of the FS-RI Reinsurance component of SAP. It is used to limit the amount of losses that can be incurred in a given year. This limit is set by the user and can be adjusted as needed. The annual loss limit helps to ensure that the company does not incur excessive losses in any given year.
  
  How to use it: 
  The annual loss limit can be set in the FS-RI Reinsurance component of SAP. The user can enter the desired limit and then save it. This limit will then be applied to all reinsurance contracts that are created in the system. If a contract exceeds the annual loss limit, it will be rejected and not allowed to be processed.
  
  Tips & Tricks: 
  It is important to set an appropriate annual loss limit that is not too low or too high. If the limit is too low, it may not provide enough protection against losses, while if it is too high, it may lead to unnecessary costs. It is also important to regularly review and adjust the annual loss limit as needed.
  
  Related Information: 
  The FS-RI Reinsurance component of SAP also includes other features such as risk management, claims management, and reporting capabilities. These features can help users better manage their reinsurance contracts and ensure that they are meeting their goals. Additionally, there are other components of SAP such as FS-CM and FS-PM that can help users manage their reinsurance contracts more effectively.