Non – Proportional Treaty

• Non – Proportional Treaty is loss – based recovery from reinsurers once the loss exceeds a certain threshold Excess or Deductible.
• Non – Proportional reinsurance the ceding company agrees to accept all losses up a predetermined level.

EXAMPLE:

• Insurer may choose to retain up to $ 5mn of losses say in respect of a Fire risk and reckon max loss on account of a fire risk accepted is $ 100mn.
• Insurer than can arrange for reinsurance up to $ 100mn (95mn XS 5mn) and it can be done by a single layer or multiple layers.