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 ?
In the minority of cases when applications are changed or declined by a reinsurer, Lincoln can tap some $20 million in reserves dedicated to "underlying retention:" the amount of risk arising from an insurance policy that is retained by Lincoln after reinsuring the balance amount of risk ceded to the reinsurer.
The broad magnitude of changes in underlying retention appears to have been driven principally by the decline in available full-time jobs for teenagers.