Explore commonly used personal finance terms.
Aggregate excess is a reinsurance arrangement in which the reinsurer covers losses exceeding a certain threshold within a policy period. This type of coverage is used by insurers to limit their exposure to high aggregate losses, enhancing financial stability. Aggregate excess policies provide a safety net, protecting insurers from large-scale claims that could otherwise impact their solvency. By capping losses, this form of reinsurance helps insurers manage risk and maintain reserve adequacy during events with unusually high claim volumes.
