a. Insurer X insures a large number of small property accounts with average premiums of $1,000. The policies range from a low of $600 to a high of $1,400 premium. Insurer X wants to grow but is inhibited by statutory surplus requirements. As the re-insurer, what kind of treaty reinsurance program would you recommend for insurer X and why.

b. Insurer Y has decided to expand its personal lines auto and home insurance program from the Middle West to the southern states, including the gulf coast states. Insurer Y has good experience with wind claims because of toreadors in the Middle West. While it expects similar tornado losses in many of the southern states, it is more concerned with hurricanes. As Insurer Y’s re-insurer what kind of treaty reinsurance program would you recommend for auto and home insurance and why.