Underlying Retention

Underlying Retention

A limit on an insurance policy's coverage past which an umbrella policy begins to pay claims. For example, if one holds an umbrella policy paying all expenses over the $200,000 limit on one's homeowners insurance, the underlying retention is $200,000.
References in periodicals archive ?
If primary companies are required to extend coverage for these losses, a significant share will likely be borne by reinsurers who will likely "follow the fortunes" of primary companies having exceeded their underlying retention.
Given the underlying retention of existing business and implemented premium yield increases, Standard & Poor's believes Coventry is well-positioned to sustain very strong earnings and cash flow performance in 2002.