Development of a Test Algorithm for Cession Strategies

New methods for computing and predicting the net gain or loss for a certain cession strategy were explored for the Premier Insurance Company of Massachusetts. Various one and two stage strategies were developed and compared using different variables. The methods used and the programs developed can be used by Premier to test future strategies. They can also be used to investigate the sensitivity of the payoff and the strategies to fluctuations in certain parameters, including CAR’s deficit.