Working Layer
Definition
An excess of loss layer with relatively low attachment point that is expected to be penetrated frequently. Covers more predictable, frequent losses.
Practical Example
$2M xs $1M working layer covering typical large property losses.
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Related Terms
Non-proportional reinsurance providing coverage for losses exceeding a specified retention amount. Can be per risk, per occurrence, or aggregate.
The loss amount at which excess of loss reinsurance coverage begins. Below this retention, the cedent pays all losses.
Historical average loss cost used in pricing reinsurance, calculated by dividing losses in a layer by exposure or premium.