Which of the following is the type of excess of loss reinsurance?

Question

Options

• Aper risk excess of loss
• Bper occurrence excess of loss
• Caggregate excess of loss
• DAll of the above

• A
  9% (5)
• B
  4% (2)
• C
  4% (2)
• D
  84% (48)

Explanation

Option D is correct because all three - per risk, per occurrence, and aggregate - are recognized types of excess of loss (XL) reinsurance, making "All of the above" the only complete answer. Options A, B, and C are not distractors in the traditional sense; they are each individually valid types, which is precisely why none of them alone is the best answer.

• Per risk XL covers losses on a single risk (e.g., one insured property) that exceed a retention threshold.
• Per occurrence XL (also called per event) covers aggregate losses from a single event (e.g., a hurricane) exceeding the retention.
• Aggregate XL covers cumulative losses across all risks over a period (typically a year) once total losses exceed a set amount.

Memory tip: Think of XL reinsurance as operating at three "zoom levels" - the individual risk (micro), the single event (meso), and the full portfolio over time (macro). If you can picture those three scales, you'll remember all three types and why D is always the comprehensive answer on this type of question.

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