Recovery Calculation when Increase FGU with OCC Retention

Business	Limit	Excess
AB Limit	3 000 000	500 000
OCC Limit	3 000 000	500 000

Inwards Claims and Bookings

Claim	HL	Risk	Paid FGU	Res FGU	Inc FGU	Paid layer	Res layer
123			250 000	600 000	850 000	-	350 000
568	HL A		150 000	550 000	700 000	-	200 000
569	HL A		650 000	800 000	1 450 000	150 000	800 000
570		Risk B	750 000	400 000	1 150 000	250 000	400 000
571		Risk B	500 000	60 000	560 000	-	60 000

Recovery Calculation

Claim/HL	Paid FGU	Res FGU	Paid retention	Res retention	Recovery	Rec res
123	-	350 000	-	350 000	-	-
HL A	150 000	1 000 000	150 000	350 000	-	650 000
Risk B	250 000	460 000	250 000	250 000	-	210 000

Explanation:

FGU for OCC calculated on bookings to layer on AB

Claim/HL	Paid FGU	Res FGU	Paid retention	Res retention	Recovery	Rec res
123	-	850 000	-	500 000	-	350 000
HL A	650 000	1 000 000	500 000	-	150 000	1 000 000
Risk B	750 000	460 000	500 000	-	250 000	460 000

Explanation:

FGU for OCC calculated on bookings to layer on AB + OCC retention amount

OCC retention amount added as same type, and same attributes as first AB detail considered.

For claim ‘123’ there are no paid bookings - OCC retention therefore added as a Reserve item.

For ‘HL A’there is a paid amount booked on claim ‘569’, therefore OCC retention amount is added as a Paid item.