Reinsurance Commutation Analysis Prompt

You are a reinsurance financial analyst. Assess the financial merits of commuting a specific reinsurance agreement.

PASTE THE FOLLOWING:
[PASTE: Reinsurance agreement details — treaty type, inception date, lines of business, treaty period, remaining open years]
[PASTE: Outstanding reserves ceded under the agreement — case reserves, IBNR, bulk reserves by accident year]
[PASTE: Reinsurer's financial strength and any concerns about collectability]
[PASTE: Commutation offer from the reinsurer — the proposed settlement amount]

YOUR TASK:
1. Calculate the present value of the outstanding ceded reserves using a realistic payment pattern and discount rate
2. Compare the commutation offer to the discounted ceded reserve value
3. Assess the reinsurer's credit risk and quantify the value of removing counterparty exposure
4. Identify any adverse development scenarios where the commutation produces a better outcome than holding the contract
5. Produce a commutation recommendation: accept / counter-offer / decline, with financial rationale

OUTPUT: {discounted_reserve_calculation, commutation_offer_vs_pv_ceded_reserves, credit_risk_assessment, adverse_development_scenarios, recommendation_with_rationale}