Glossary

Our glossary explains technical terms from the areas finance and reinsurance. We hope it facilitates the understanding of our texts, publications and annual reports. If you have comments or suggestions, please use our feedback form!

• Securitisation instruments
  instruments for transferring reinsurance business to the capital markets with the goal of refinancing or placing insurance risks.
• Segment reporting
  presentation of items in the balance sheet and income statement split according to functional criteria such as business sectors and regions.
• Silent cyber
  unintended coverage of cyber-related losses in traditional reinsurance treaties
• Solvency II
  European directive for the insurance industry. The new European regulatory regime for (re)insurers that entered into force on 1 January 2016 on the basis of the Solvency II Directive (Directive 2009 / 138 / EC) is comprised of risk-based capital requirements and imposes quantitative, qualitative and reporting-related requirements in three main areas known as pillars.
• Solvency capital ratio (SCR)
  percentage coverage of the supervisory capital requirement (target solvency capital) under Solvency II by eligible own funds.
• Spread loss treaty
  treaty between an insurer and a reinsurer that covers risks of a defined portfolio over a multi-year period.
• Structured entity
  entity with specific characteristics not bound to a particular legal form that is used to conduct closely defined activities or to hold assets and for which the traditional concept of consolidation – based on voting rights – is often inadequate for determining who exercises control over the entity.
• Structured reinsurance
  reinsurance with limited potential for profits and losses. In most cases customers strive for risk equalisation over time or solvency relief, both of which have a stabilising effect on the ceding company's balance sheet.
• Surplus reinsurance
  form of proportional reinsurance under which the risk is not spread between the insurer and reinsurer on the basis of a previously agreed, set quota share. Instead, the insurer determines a maximum sum insured per risk up to which it is prepared to be liable. Risks that exceed the ceding company’s retention (surpluses) are borne by the reinsurer. The reinsurer’s lines thus vary according to the level of the retention and the sum insured of the reinsured contract. The reinsurer’s liability is generally limited to a multiple of the ceding company’s retention.
• Survival ratio
  ratio of loss reserves to paid losses under a specific contract or several contracts in a balance sheet year.