What is capacity in SAP FS-RI - Reinsurance?

SAP Term: capacity

• Component: FS-RI

• Component Name: Reinsurance

• Description: a The capacity represents an upper limit on the amount of risk that is transferred in a proportional re-insurance treaty. This limit is expressed by the maximum liability of the reinsurer for each liability. b The capacity represents the ability or willingness of the reinsurance market to take on specific business or risks.

Smart SAP Assistant

• Key Concepts: 
  Capacity in FS-RI Reinsurance is the maximum amount of risk that a reinsurer is willing to accept for a particular line of business. It is usually expressed as a percentage of the total amount of risk that the reinsurer is willing to accept. 
  
  How to use it: 
  Capacity can be used to determine the maximum amount of risk that a reinsurer is willing to accept for a particular line of business. This can be used to help determine the amount of reinsurance coverage that should be purchased for a particular line of business. 
  
  Tips & Tricks: 
  When setting capacity, it is important to consider the amount of risk that the reinsurer is willing and able to accept. It is also important to consider the potential losses that could occur if the reinsurer does not have enough capacity to cover all of the risks associated with a particular line of business. 
  
  Related Information: 
  Capacity can also be used to determine the amount of capital that should be allocated for a particular line of business. This can help ensure that there is enough capital available to cover any potential losses associated with a particular line of business. Additionally, capacity can also be used to determine the amount of reinsurance coverage that should be purchased for a particular line of business.