Which of the following is NOT a possible result when a property-liability company purchases reinsurance?

Question

Quizplus · Accepted Answer

The purchase of reinsurance generally leads to improved risk sharing, limits on losses on reinsured policies, stabilized cash flows, and an improved capital position for property-liability companies. However, dilution of earnings per share is not a common result of purchasing reinsurance. Instead, the cost of the reinsurance premium may affect earnings. Therefore, option D is the correct answer as it is the only one that does not typically result from the purchase of reinsurance.

Which of the Following Is NOT a Possible Result When