AI Reinsurance Treaty Adequacy Review Playbook

A regional insurer is reviewing its property catastrophe reinsurance treaty ahead of the January 1 renewal. The insurer has grown its coastal exposure by 34% in the past 2 years. The current treaty provides $50M excess of $10M per occurrence. The insurer's PML estimates have not been updated since the coastal growth.

When to use this playbook

• Use this playbook when the decision looks like the situation above: A regional insurer is reviewing its property catastrophe reinsurance treaty ahead of the January 1 renewal.
• It is a fit when you have source files in hand and need a structured, reviewable analysis — not a generic chat answer about "Reinsurance Treaty Adequacy Review".
• Do not use it as a substitute for licensed, legal, clinical, or authorized official judgment in the domain.

What you'll need

• Current treaty terms and structure ($50M xs $10M per occurrence)
• In-force property portfolio with geographic coordinates and construction characteristics
• Prior PML study (2 years old)
• CAT model output for the current portfolio at 1-in-100 and 1-in-250 year return periods
• Regional market reinsurance pricing trends

Attachments: Documents (Documents)

You are an actuary reviewing property catastrophe reinsurance treaty adequacy for a regional insurer. I am attaching:

Work only from the attached source files. If a conclusion is not supported, say so.

Produce:
1. Update the PML analysis for the 34% coastal exposure growth: what is the current 1-in-100 and 1-in-250 year PML compared to the prior study?
2. Assess whether the current treaty attachment point ($10M) and limit ($50M) are still adequate given the updated PML.
3. Identify the treaty gaps: are there scenarios (multi-occurrence season, aggregate cap exhaustion) where the insurer retains more than its stated risk appetite?
4. Calculate the additional reinsurance premium cost of closing identified gaps and compare to the cost of retaining the risk.
5. Tell me the treaty renewal recommendation: maintain, increase limit, lower attachment, or restructure.

Call out where independent models are likely to disagree, and list follow-up documents a reviewer should request.

What to expect

• Updated PML analysis at 1-in-100 and 1-in-250
• Treaty attachment and limit adequacy assessment
• Treaty gap scenarios with net retention analysis
• Cost of gap closure vs. risk retention
• Treaty renewal recommendation with structure

Review before you act

• Validate this output against source files before relying on it: Update the PML analysis for the 34% coastal exposure growth: what is the current 1-in-100 and 1-in-250 year PML compared to the prior study?.
• Validate this output against source files before relying on it: Assess whether the current treaty attachment point ($10M) and limit ($50M) are still adequate given the updated PML.
• Validate this output against source files before relying on it: Identify the treaty gaps: are there scenarios (multi-occurrence season, aggregate cap exhaustion) where the insurer retains more than its stated risk appetite?.
• Validate this output against source files before relying on it: Calculate the additional reinsurance premium cost of closing identified gaps and compare to the cost of retaining the risk.
• Confirm every cited figure, date, counterparty, or requirement against the attached originals — models compress and can drop a qualifier.
• Treat disagreement between models as a review item, especially on classification, materiality, and recommended next action.
• Do not authorize an operational, clinical, legal, credit, or enforcement action solely because the models agree.