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Aggregate Excess of Loss

The reinsurer indemnifies an insurance company (the reinsured) for an aggregate (or cumulative) amount of losses in excess of a specified aggregate amount. Can be written excess of a dollar amount (e.g., $500,000 in the aggregate excess of $500,000 in the aggregate) or excess of a percentage (loss ratio) amount (e.g., 50 loss ratio points excess of 75 loss ratio points). Can also be written with an interior deductible, i.e., to apply only to losses excess of a stated dollar amount (e.g., $500,000 in the aggregate excess of $500,000 in the aggregate applying only to losses greater than $50,000 per loss).