Loss Scenario No Money Left
Four members contribute a total of $400k to be used to pay for all claims in the shared loss layer.
Actual Losses
Initial Loss Layer Contributions
However, no one pays more!
Member 1: $90k
Member 1: $60k
Member 2: $90k
Member 2: $110k
Member 3: $40k
105% Loss Ratio in the layer
Member 3: $80k
If the entire fund is used, there is no money left to distribute to the members.
Member 4: $150k
Member 4: $200k
$400,000
$420,000
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