What role does facultative reinsurance play in South Africa?
South Africa has significant concentrations of high-value risks — mining, petrochemical,...
Archives: FAQs
How is facultative capacity placed?
Often via subscription: multiple reinsurers may each take a percentage line on a large risk,...
What are the two main forms of facultative reinsurance?
Proportional facultative: The reinsurer takes a share of premiums and losses.
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When is facultative reinsurance typically used?
Very large risks that exceed treaty limits (e.g., power plants, mines, refineries).
Unusual...
How does facultative differ from treaty reinsurance?
Facultative: Case-by-case, risk-specific, individually negotiated.
Treaty: Automatic...
Why use an intermediary like Oak Tree?
Access to global markets: Securing reinsurers with appetite for South African risks.
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How often are treaties renewed?
Typically annually. In South Africa, renewals align with global cycles (1 January, 1 July),...
What happens if treaty limits are exhausted?
Losses above the treaty cap remain the cedant’s responsibility, unless additional layers are...
What information do reinsurers expect in a treaty submission?
5–10 years of loss data.
Premium and exposure breakdowns.
Accumulation control...
How does treaty reinsurance interact with solvency regulation in South Africa?
Reinsurance reduces insurers’ required capital under the Prudential Authority framework....