How to interpret direct&assumed losses in Intercompany pooling arrangement?
In a scenario where there are two companies A and B in an intercompany pooling arrangement, how do I calculate direct & assumed losses and premiums? Can you explain with an example please?
Where I am getting confused is, in my mind the losses directly incurred by, say, company A would be direct loss and the loss it assumes through the pooling arrangement is assumed loss. So I am compelled to add these two, but this might double count the losses.
Comments
Pooling is done differently for Schedule P and for non-Schedule P figures. What you describe is the method for non-Schedule P.
The wiki example goes through this in detail:
https://battleacts6us.ca/wiki6us/Odomirok.15-P#Inter-Company_Pooling:~:text=I%20put%20it,13%20(4%20problems)