What is duration of liability in SAP FS-RI - Reinsurance?

SAP Term: duration of liability

• Component: FS-RI

• Component Name: Reinsurance

• Description: A contractually fixed period for which the insurer pays an insurance benefit for business interruption damage or additional costs. The duration of liability is usually between 12 and 24 months for insurance for business interruption resulting from fire.

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• Key Concepts: 
  Duration of liability is a concept used in the FS-RI Reinsurance component of SAP. It is the period of time during which a reinsurer is liable for a claim. This period is determined by the reinsurance contract and can be either fixed or open-ended. 
  
  How to use it: 
  In SAP, duration of liability is used to determine when a reinsurer's liability for a claim ends. This information is used to calculate the amount of reinsurance premiums that are due and to ensure that all claims are paid in a timely manner. 
  
  Tips & Tricks: 
  When setting up a reinsurance contract in SAP, it is important to ensure that the duration of liability is accurately entered. This will ensure that all claims are paid in a timely manner and that the correct amount of premiums are calculated. 
  
  Related Information: 
  Duration of liability is closely related to other concepts such as cession rate, cession limit, and retrocession rate. These concepts are also used in the FS-RI Reinsurance component of SAP and should be taken into consideration when setting up a reinsurance contract.