Quota Share optimisation for Solvency purposes

A company, under capital strain due to fast premium growth, asked us to consider what proportion of their motor portfolio should be ceded to minimise risk of falling below capital requirements, while still retaining as much as possible of their profitable portfolio.

What started as a simple question, ended up with Lux modelling the entire company’s financial performance for all lines of business for the next 7 years, to be able to insightfully answer this question.

The client implemented our recommendations and just met its solvency capital requirements – as was planned in our projections. Next year is looking rosy for this client.