Pricing in General Insurance

56 Pricing in General Insurance

contract that denes the duration of this period and the way that losses can be aggregated

is called the hours clause.

The reinsured normally has the option to choose at what date and time the numberof

allowed consecutive hours start and can therefore maximise the reinsurance recovery, as

illustrated in Figure 3.8. Subject to the limit and possible reinstatements of such a limit, the

reinsured has also the option to declare another loss occurrence as long as this is wholly

outside the period of the rst loss.

Here is an example of an hours clause from an actual contract (with minor modica-

tions to make it simpl ...