How do you assess and manage risk in reinsurance?

Your Answer

How To Answer This Question?

When answering this question, it's important to demonstrate your knowledge of risk assessment and management principles specific to reinsurance. Start by explaining the key factors you consider when assessing risk, such as the type of insurance policies, historical loss data, and the financial stability of the primary insurer. Mention any tools or models you use, like catastrophe modeling or actuarial analysis.

Next, discuss your approach to managing risk. This could include diversifying the reinsurance portfolio, setting appropriate retention levels, and using retrocession to transfer some of the risk to other reinsurers. Provide examples from your experience where you successfully assessed and managed risk, highlighting the outcomes.

For example: "In my previous role, I assessed risk by analyzing historical loss data and using catastrophe models to predict potential future losses. I managed risk by diversifying our portfolio across different lines of business and geographies, and by setting retention levels that balanced risk and reward. Additionally, I used retrocession to further mitigate risk, which resulted in a more stable and predictable loss ratio for our company."