Group Life Reinsurance

Life

Group life schemes concentrate many lives under a single master policy, creating both scale efficiency and accumulation risk. Power Re supports cedants with proportional capacity to grow their books and non-proportional catastrophe cover to protect against single-event mortality shocks.

Power Re approaches this line as a specialist: we assess each risk on its own merits, price it with actuarial rigor, and structure cover that genuinely fits the cedant’s exposure and objectives, never a one-size template.

Structures

How we structure it

The structures we most often deploy for this line, proportional and non-proportional, tailored to your book.

Quota Share

Proportional capacity to support growth and smooth results across the scheme.

Surplus

Retain small risks, cede the surplus above your retained line on larger lives.

Cat XoL

Protection against multi-life losses from a single catastrophic event.

Risk

Key risks & considerations

What we focus on when we underwrite this line.

Catastrophe mortality, many lives under one scheme exposed to a single event.
Anti-selection & scheme design, eligibility, free-cover limits and actively-at-work rules.
Experience volatility, small schemes swing sharply on a single claim.

Our appetite

Employer and affinity schemes with sound administration, clear eligibility and credible experience.

Technical note

We price with credibility-weighted experience and exposure rating, and cap single-event exposure with catastrophe XoL calibrated to the largest concentration of lives.

Models

Actuarial modeling

The frequency and severity models we use to price this line, and the loss it aggregates to.

Frequency models

Binomial (lives)Poisson (deaths)

Severity models

Fixed sum assuredEmpirical distribution of sums

Expected mortality claims

$$E[S]=\sum_{x} n_x\,q_x\,\mathrm{SA}_x$$

n_x lives aged x, q_x the one-year mortality rate, SA the sum assured.

Illustrative mortality

Age x	q_x per 1,000
30	1.0
40	1.8
50	4.2
55	6.5
60	10.5
65	17.0
70	27.0

Illustrative one-year mortality rates. Actual pricing uses recognized valuation and industry mortality tables.

Deep dive

Group Life modeling in depth

How the frequency, severity and catastrophe models above turn into numbers.

1. The mortality and frequency model

A group scheme covers n lives; life i aged x has a one-year mortality rate $q_{x}$. The number of deaths D is a sum of independent Bernoulli trials, and expected claims aggregate the sums assured.

Expected deaths and claims

$$E[D]=\sum_i q_{x_i},\qquad E[S]=\sum_i q_{x_i}\,\mathrm{SA}_i$$

For a homogeneous group with common rate q, $D\sim\mathrm{Binomial}(n,q)$ with variance $nq(1-q)$; when q is small and n large, D is well approximated by a Poisson.

Frequency distribution

$$D\sim\mathrm{Binomial}(n,q)\;\approx\;\mathrm{Poisson}(\lambda),\quad \lambda=\textstyle\sum_i q_{x_i}$$

Worked example

A scheme of 1000 lives with average $q=2.5$ per 1000 and average sum assured 100. Expected deaths $E[D]=1000\times 0.0025=2.5$; expected claims $E[S]=2.5\times 100=250$. The standard deviation of deaths is $\sqrt{1000\times 0.0025\times 0.9975}\approx 1.58$, so small schemes are volatile.

2. The distribution of deaths

The Poisson model gives the full distribution $P(D=k)=e^{-\lambda}\lambda^{k}/k!$, which drives the price of the tail and the need for catastrophe cover.

Worked example

With $\lambda=2.5$: $P(0\text{ deaths})=e^{-2.5}\approx 8.2\%$, and $P(D\ge 6)\approx 4.2\%$. A six-death year produces claims of 600 against an expected 250, a 2.4x overshoot, exactly the volatility reinsurance absorbs.

3. Catastrophe mortality

Group schemes concentrate lives, so a single event, a transport disaster or a workplace accident, can affect many at once. This accumulation is transferred with catastrophe excess of loss.

Worked example

Catastrophe XoL 5000 xs 1000. An accident kills 20 insured lives with average sum assured 100, a 2000 loss. The reinsurer pays $\min(\max(2000-1000,0),5000)=1000$; the cedant keeps 1000.

4. Experience rating and credibility

For an established scheme, Power Re blends the scheme’s own mortality experience $\bar X$ with the standard table $\mu$ using a credibility factor Z (Bühlmann-Straub), weighted by exposure m.

Credibility-weighted mortality

$$\hat q = Z\,\bar X + (1-Z)\,\mu,\qquad Z=\frac{m}{m+k}$$

Worked example

A scheme’s 5-year experience shows $\bar X=3.0$ per 1000 against a table $\mu=2.5$. With exposure $m=5000$ life-years and $k=15000$, $Z=5000/20000=0.25$, so the credibility mortality is $\hat q=0.25\times 3.0+0.75\times 2.5=2.625$ per 1000.

Discipline

Our underwriting approach

The discipline is the same across every line we write.

Risk selection

We assess each risk on its merits and let marginal business go, growth by quality, not volume.

Pricing discipline

Experience and exposure rating, credibility-weighted, load the price for volatility and cost of capital.

Accumulation control

Clear limits manage concentration by event, geography and cedant across the portfolio.

Claims partnership

Fast, fair and transparent claims handling, the moment our promise is tested.

Why Power Re

Why cede Group Life Reinsurance to Power Re

✓
Specialist expertise
Deep technical knowledge of the line and of the Latin American market.
✓
Fast, clear decisions
A timely yes or no, with terms and capacity you can rely on.
✓
Financial strength
13× regulatory solvency coverage and a disciplined retrocession program.
✓
Long-term partnership
We co-design programs and stand with cedants through the cycle.

Let’s build resilient portfolios together

Partner with a reinsurer that combines technical discipline, financial strength and deep regional insight.

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