Retrocession
Retrocession is when an insurance company gets its own insurance from another company. Think of it as "insurance for insurance companies." Just like a person buys insurance to protect against risk, insurance companies use retrocession to share their risks with other insurers. This is especially common in complex insurance areas like natural disasters or large commercial risks. It's a way for insurance companies to protect themselves and stay financially stable when big claims happen. You might also hear it called "reinsurance of reinsurance" or "secondary risk transfer."
Examples in Resumes
Managed Retrocession treaty negotiations resulting in $50M risk coverage
Analyzed and structured Retrocession agreements for catastrophe risks
Led team handling Retrocession claims processing and portfolio management
Typical job title: "Retrocession Underwriters"
Also try searching for:
Where to Find Retrocession Underwriters
Professional Organizations
Job Boards
Industry Networks
Example Interview Questions
Senior Level Questions
Q: How would you approach structuring a retrocession program for a major catastrophe risk?
Expected Answer: Should demonstrate understanding of risk assessment, market conditions, pricing strategies, and ability to structure complex deals. Should mention consideration of different layers of coverage and various market participants.
Q: What factors do you consider when pricing retrocession coverage?
Expected Answer: Should discuss historical loss data, market cycles, exposure analysis, and relationship with direct insurance and reinsurance pricing. Should show understanding of both technical and market pricing factors.
Mid Level Questions
Q: Explain the difference between facultative and treaty retrocession.
Expected Answer: Should explain that facultative covers individual risks while treaties cover entire portfolios, with examples of when each might be used.
Q: How do you evaluate the financial strength of retrocession partners?
Expected Answer: Should mention credit ratings, financial statements analysis, market reputation, and claims-paying history as key factors in partner selection.
Junior Level Questions
Q: What is retrocession and why is it important?
Expected Answer: Should be able to explain that it's insurance for reinsurance companies and its role in spreading risk in the insurance market.
Q: What are the basic types of retrocession agreements?
Expected Answer: Should identify proportional and non-proportional agreements and explain their basic differences in simple terms.
Experience Level Indicators
Junior (0-2 years)
- Basic understanding of insurance and reinsurance concepts
- Familiarity with treaty documentation
- Basic risk assessment skills
- Understanding of claims processing
Mid (2-5 years)
- Treaty analysis and negotiation
- Portfolio management
- Risk pricing and modeling
- Client relationship management
Senior (5+ years)
- Complex program structuring
- Strategic planning and market analysis
- Team leadership and mentoring
- High-level stakeholder management
Red Flags to Watch For
- No understanding of basic insurance principles
- Lack of knowledge about reinsurance markets
- Poor grasp of risk assessment concepts
- No experience with treaty documentation
