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Glossary
Market and regulation

Retention

Part of the risk that the company decides to assume instead of transferring to the insurance market.

In practice

It is structured through deductibles, and its correct level depends on cash flow and expected frequency, not just premium savings. A well-calculated retention is a financial decision; a poorly calculated one is an exposure.

Where it is addressed

This term is covered in Gestión del programa.

Related terms

ExcessAmount of damage borne by the insured in each claim before the insurer indemnifies.Annual aggregate excessAccumulated retention cap in the financial year: once reached, the insurer is liable for subsequent claims without deducting excess.CaptiveInsurer or reinsurer owned by the business group itself, created to orderly retain part of its risk.ActuaryProfessional who applies statistical and financial methods to the calculation of premiums, provisions and solvency of an insurer.Insurance agentMediator who distributes insurance on behalf of one or several insurers, with whom they maintain an agency contract.Objective analysisObligation of the broker to advise based on a sufficient number of market contracts and with professional, not commercial, criteria.
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