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Burning Cost Ratio Pure Loss Cost


Definition of "Burning cost ratio (pure loss cost)"

Ratio of excess losses to premium income. Excess losses are those that a reinsurer is responsible for if its coverage is in effect during the period under consideration. The premium income used for excess of loss and catastrophe LOSS reinsurance is the gross premium less the expense of reinsurance. The premium income used for STOP LOSS REINSURANCE is the earned premium income. The excess losses are defined as the incurred losses in excess of the cedent's retention up to the limits specified in the reinsurance contract.



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