Quota Share (QS)

Graphene provides a default built-in template for modelling conventional Quota Share (QS) contracts. The default template for QS supports the following financial features:

• occurrence limit

• upfront premium income and brokerage expense

• contract inception / expiration dates

• participation

• currency exchange

Structure

The general structure of a default QS using the built-in template in Graphene is:

{
    "_schema": "QuotaShare_1.0",
    "inception_date": 1546300800,
    "expiration_date": 1577836800,
    "limit_value": 30000.0,
    "premium_value": 3000.0,
    "brokerage": 0.1,
    "share": 0.2,
    "currency": "GBP"
}

Parameters

The parameters are defined as follows:

Parameter Name	Required	Type	Description
inception_date	Yes	double	Timestamp on which the contract incepts. The coverage period is inclusive of this time. See Ledger Format for more details on timestamps.
expiration_date	Yes	double	Timestamp on which the contract expires. The coverage period is exclusive of this time. See Ledger Format for more details on timestamps.
limit_value	Yes	double	The occurrence limit of the contract in currency units.
premium_value	Yes	double	The amount of premium paid upfront in currency units. Premium is paid at time of inception.
brokerage	Yes	double	The percentage of brokerage paid on the upfront premium. Brokerage is paid at time of inception.
share	Yes	double	The share or participation assumed for this contract.
currency	No	string	The currency in which the input currency values (limit_value and premium_value) are defined. Defaults to the base currency if not set.

Output Records

The QS financial structure can produce 5 different types of records:

• Loss: Layered losses, that is losses that are covered by the contract. Losses generally have a negative value.

• Premium: Upfront premium paid at the time of inception. Premium is accounted for as a positive credit.

• BrokerageFee: Upfront premium brokerage paid at the time of inception. Brokerage is accounted as an expense debit with a negative value.

References

A detailed description of the financial modelling internals of the QS structure can be found in Quota Share Financial Modelling Step-By-Step.