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Reinsurance Recoverables

Calculate the Net Reinsurance Recoverables, Net Technical Provisions After Reinsurance, and Recoverables to Technical Provisions Ratio instantly.

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Net Reinsurance Recoverables

€36 036 000

1Step 1

Gross Reinsurance Recoverables

Gross Reinsurance Recoverables=Gross Best Estimate Claims×Ceded Share\textit{Gross Reinsurance Recoverables} = \textit{Gross Best Estimate Claims} \times \textit{Ceded Share}
2Step 2

Recoverables After Dispute Haircut

Recoverables After Dispute Haircut=Gross Reinsurance Recoverables×100−Dispute Haircut100\textit{Recoverables After Dispute Haircut} = \textit{Gross Reinsurance Recoverables} \times \frac{100 - \textit{Dispute Haircut}}{100}
3Step 3

Expected Counterparty Default Loss

Expected Counterparty Default Loss=Recoverables After Dispute Haircut×Counterparty Default Haircut\textit{Expected Counterparty Default Loss} = \textit{Recoverables After Dispute Haircut} \times \textit{Counterparty Default Haircut}
4Step 4

Net Reinsurance Recoverables

Net Reinsurance Recoverables=Recoverables After Dispute Haircut−Expected Counterparty Default Loss\textit{Net Reinsurance Recoverables} = \textit{Recoverables After Dispute Haircut} - \textit{Expected Counterparty Default Loss}
5Step 5

Net TP After Reinsurance

Net TP After Reinsurance=Gross TP Before Reinsurance−Net Reinsurance Recoverables\textit{Net TP After Reinsurance} = \textit{Gross TP Before Reinsurance} - \textit{Net Reinsurance Recoverables}
6Step 6

Recoverables to TP Ratio

Recoverables to TP Ratio=Net Reinsurance RecoverablesGross TP Before Reinsurance\textit{Recoverables to TP Ratio} = \frac{\textit{Net Reinsurance Recoverables}}{\textit{Gross TP Before Reinsurance}}

Understand the Reinsurance Recoverables

Overview

This calculator implements the Reinsurance Recoverables Engine within the Solvency II valuation framework.[1] Reinsurance Recoverables are defined as the part of technical provisions that is expected to be recovered from insurance and reinsurance undertakings, net of the adjustment for counterparty default risk (LGD).

Input Terms

  • Gross Technical Provisions: The total value of insurance and reinsurance obligations before accounting for reinsurance.[1]
  • Ceded Share: The proportion of technical provisions transferred to reinsurers according to the treaty structure.
  • Default Adjustment (LGD): The prescribed deduction to recoverables based on the reinsurer's credit-default risk.

Technical Rationale

The Reinsurance Recoverables Engine is a fundamental component of the undertaking’s technical provision valuation. It ensures that the undertaking’s Net Technical Provisions are representative of its true economic exposure after accounting for risk-mitigation.

The calculation multiplies the gross provisions by the ceded percentage and then subtracts the loss-given-default adjustment factors derived from the reinsurers' credit quality. This ensures that the undertaking can quantify the net liquidity and capital benefit provided by its reinsurance program. The results feed the Technical Provisions and Basic Own Funds views.

Important Notes

  • Default Correlation: The engine assumes a diversified pool of reinsurers. For concentrated programs, additional Counterparty Default Risk capital should be held.
  • Reporting: The displayed result is intended to support the valuation and recoverables components feeding the S.02.01 Balance Sheet and S.12/S.17 Technical Provision reporting views.[2]

Sources

  1. Directive 2009/138/EC - Art. 81 (Recoverables from reinsurance contracts and special purpose vehicles) - EIOPA
  2. Commission Implementing Regulation (EU) 2015/2450 - QRT S0201 (Balance sheet) - EUR-Lex

Default values are illustrative sample inputs for navigation, training, and QA. Replace them with controlled data before using the result in capital analysis, governance, or reporting decisions.