What type of excess of loss reinsurance looks at losses from a specific risk in a single occurrence?

The type of excess of loss reinsurance that focuses on losses from a specific risk in a single occurrence is per risk excess of loss. This type of reinsurance is designed to protect the insurer from large losses that arise from a particular type of risk after a single event takes place.

In this context, a specific risk refers to the insurance taken on a particular line or type of business, such as property or casualty insurance. If a single event, like a natural disaster or a major liability claim, causes multiple losses under a given risk category, the per risk excess of loss reinsurance kicks in when the losses exceed a predetermined threshold. This protects the insurer from catastrophic financial hits stemming from that one event related to that specific risk.

This approach differs from other types of excess of loss reinsurance. Aggregate excess of loss focuses on the total losses over a certain period rather than losses from individual occurrences. Per occurrence excess of loss would generally cover losses arising from one event but applies broadly across multiple types of coverage, while quota share does not involve excess of loss at all, as it involves sharing premiums and losses at an agreed percentage rather than providing coverage above a certain limit after losses occur. Thus, the identification of per risk excess of loss here is correctly aligned