What is excess of loss in SAP FS-RI - Reinsurance?

SAP Term: excess of loss

• Component: FS-RI

• Component Name: Reinsurance

• Description: Excess of loss reinsurance is the most common form of coverage provided by non-proportional reinsurance in which the loss amount is crucial. It protects the cedent the primary insurer who cedes risks to the reinsurer from single losses = excess per-risk or accumulated losses = excess per-event. The primary insurer assumes a retention priority for each loss and the reinsurer assumes the portion of the loss that exceeds this retention excess of loss. The cost of excess of loss reinsurance is determined by the individual loss experience quotation and not by the original premium as is the case with proportional reinsurance.

Smart SAP Assistant

• Key Concepts: 
  Excess of Loss is a type of reinsurance contract in the FS-RI Reinsurance component of SAP. It is a form of insurance that covers losses that exceed a certain amount. The insurer pays the excess amount, up to the limit of the policy. 
  
  How to use it: 
  In SAP, Excess of Loss reinsurance contracts are set up in the FS-RI Reinsurance component. The insurer and reinsurer must agree on the terms of the contract, including the amount of coverage and the limit of the policy. Once the contract is set up, it can be used to process claims and payments for losses that exceed the policy limit. 
  
  Tips & Tricks: 
  When setting up an Excess of Loss reinsurance contract in SAP, it is important to ensure that all parties involved understand and agree to the terms of the contract. This will help to avoid any misunderstandings or disputes later on. 
  
  Related Information: 
  For more information about Excess of Loss reinsurance contracts in SAP, please refer to the FS-RI Reinsurance documentation on SAP Help Portal.