1.1 An insurance company currently has a maximum gross retention of $60 000 and a 40%
quota share treaty. It also has a five gross line surplus treaty. At renewal it decides to double
its net retention and increase the quota share cession to 50%. It also decreases the surplus
treaty capacity to three gross lines. The insurer accepts a risk with a sum insured of $550
000. Any excess amount would be facultatively placed. Apportion a loss amount of $200
000 suffered under the policy. 15 Marks