A call option on the loss ratio incurred in writing catastrophe insurance with a capped payout is referred to as a maximum call spread.

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A call option on the loss ratio incurred in writing catastrophe insurance with a capped payout is referred to as a call spread option, not a maximum call spread. A call spread involves buying a call option and selling another call option with a higher strike price, which effectively caps the payout.

A Call Option on the Loss Ratio Incurred in Writing