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Insurance Glossary

Attachment Point

Industry

Definition

The dollar amount of loss at which reinsurance coverage begins to apply in an excess of loss arrangement. For example, if the attachment point is $1 million, the reinsurer only pays losses exceeding $1 million.

Definición en Español

ES

Punto de Adhesión

La cantidad en dólares de pérdida en la que la cobertura de reaseguro comienza a aplicarse en un arreglo de exceso de pérdida. Por ejemplo, si el punto de adhesión es $1 millón, el reasegurador solo paga pérdidas que excedan $1 millón.

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Related Terms

Excess of Loss
A non-proportional reinsurance arrangement where the reinsurer pays losses that exceed a specified amount (attachment point), up to a maximum limit. The reinsurer only responds when losses exceed the retention, regardless of premium sharing.
Retention
The amount of risk that the ceding company keeps for its own account before reinsurance coverage applies. Also called the deductible or attachment point in some contexts. Higher retention means the ceding company bears more risk but pays lower reinsurance premiums.
Non-Proportional Reinsurance
A reinsurance arrangement where the reinsurer pays only when losses exceed a specified threshold, regardless of premium sharing. Includes excess of loss and stop loss arrangements. The reinsurer's obligation is triggered by the size of the loss, not by a fixed percentage.
Actuary
A business professional who analyzes probabilities of risk and risk management, including calculation of premiums, dividends, and other applicable insurance industry standards.
Underwriting
The process by which an insurer evaluates the risk of insuring a person or property and determines coverage terms and premium rates.
Loss Ratio
The ratio of losses paid plus loss reserves to premiums earned, used by insurers to measure underwriting profitability and pricing adequacy.
Combined Ratio
The sum of the loss ratio and expense ratio, measuring an insurer's overall underwriting profitability. A ratio below 100% indicates underwriting profit.
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