A. Reinsurance risks

A.i Property reinsurance risks

Reinsurance property classes

	2008 Gross premium £m	Current maximum line size £m	2008 Average line size £m
Catastrophe reinsurance (per programme)	171	50	4.6
Per risk property reinsurance	54	20	1.8
Proportional reinsurance	35	5	1.0

Notes:

1. Limits are set in US dollars converted to sterling at a rate of £1 = US$1.5 and therefore currency rate of exchange changes may increase or reduce the sterling limits.
2. Maximum line size is after business written and ceded by specific proportional treaties to Amlin Bermuda Ltd.
3. Premium are stated gross of acquisition costs.

Catastrophe reinsurance protects insurance companies against catastrophic losses, such as windstorm or earthquake, which may impact more than one risk written by the client. This portfolio is a key part of the insurance risk written by the Group. Programmes are placed on a layered or excess of loss basis. Territorial exposures, from a number of programmes, are much higher, but are carefully recorded and analysed through loss simulations or realistic disaster scenarios.

Per risk property reinsurance is also written on an excess of loss basis but covers loss or damage to a single risk within the reinsured’s portfolio. This portfolio protects insureds against large individual property losses and will also be affected by large catastrophes. Proportional reinsurance covers a proportional share of a reinsureds portfolio of business subject to payment of commission and/ or profit commission. Almost all proportional reinsurance written by the Group in this class is property business and risk exposure is limited to $7.5 million for any one risk.

The portfolio of Reinsurance business is written with the aim of achieving territorial diversification. However, a severe catastrophe to a major economic zone in Europe, Japan, Australasia or the USA is likely to result in an overall loss to the portfolio prior to retrocessional reinsurance.

A.ii Other reinsurance risks

The Group also writes other reinsurance classes which contribute diversified exposure to the portfolio. The main classes with the maximum sum insured lines are shown below:

Aviation, marine and special risks reinsurance classes

	2008 Gross premium £m	Current maximum line size £m	2008 Average line size £m
Aviation reinsurancee (per programme)	1	27	6.7
Marine reinsurancee (per programme)	18	67	2.6
Special risks	13	20	4.8

Notes:

1. Limits are set in US dollars converted to sterling at a rate of £1=US$1.5 and therefore currency rate of exchange changes may increase or reduce the sterling limits.
2. Maximum line size is after business written and ceded by specific proportional treaties to Amlin Bermuda Ltd.
3. Premium are stated gross of acquisition costs.

The business writes a portfolio of aviation and marine reinsurance risk which protects insurers against losses to their direct portfolios of business. This is written on an excess of loss basis.

The special risks account is mostly terrorism excess of loss reinsurance which is written from all parts of the world and is written without reinsurance protection.

The geographical spread of all Reinsurance classes is shown below: