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What is the purpose of a quota-share treaty in reinsurance?
  • a)
    To provide protection against catastrophic losses.
  • b)
    To increase the insurer's underwriting capacity.
  • c)
    To stabilize profits.
  • d)
    To share risks with multiple reinsurers.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is the purpose of a quota-share treaty in reinsurance?a)To provid...
The purpose of a quota-share treaty in reinsurance is to increase the insurer's underwriting capacity. It allows the insurer to cede a portion of each policy to the reinsurer, thereby expanding its ability to underwrite new business and share the risk with the reinsurer.
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What is the purpose of a quota-share treaty in reinsurance?a)To provide protection against catastrophic losses.b)To increase the insurer's underwriting capacity.c)To stabilize profits.d)To share risks with multiple reinsurers.Correct answer is option 'B'. Can you explain this answer?
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