Summary

Traditionally, the insurance business is divided into two classes: life insurance and all other types of insurance. When these classes are characterized, it is important to note that life insurance is the long-term business, and the second class species are short-term.

Despite the fact that catastrophic and other property risks in practice are in one package, these differences require that the insurance company develop dramatically different approaches. If the behavior criterion chooses average gross cash flows before the disaster is over, the regional insurance company should try to maximize the catastrophic risks on the international market if the reinsurance premium is not unnaturally high. This conclusion is just as proportionate as well as disproportionate reinsurance.

In other words, when there is a strong dependence on the risks associated with the portfolio, it is financially profitable to produce a long-term business of business, or even risk distribution, even when all incoming bonuses are fully reserved and invested so that their current value remains unchanged. Moreover, it is also unlikely that any kind of mixed behavior - recession-level shift over the years.

Catastrophic risks should be placed in a broader extent to maximize the effect of risk distribution in the "space", even if the company rewards minimum revenue after each year.