What is Capacity?

Capacity is An insurer is limited, by its assets, liabilities and the reinsurance treaties in which it has contracted, to a maximum amount of total risk exposure at any one geographical location. The geographical location can be defined by postcode, State or by definition of latitudinal and longitudinal degrees. The amount of Sum Insured risk exposure that the insurer can accept and place on risk, up to the maximum limit, is referred to as the insurers capacity.


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