Allocation of Losses in Complex Insurance Coverage Claims

Allocation is a fundamental issue impacting every society and transcending virtually every major sector and function within a society. Economists sometimes describe this concept as society’s allocation of its resources between guns and butter. In the world of insurance, the focus is on allocating losses between policyholders and their insurers. In the world of reinsurance, allocation issues involve cessions by ceding companies to their reinsurers….
By: Hinshaw & Culbertson – Insights for Insurers