Thanks for your question :)
Let's start with the answer given in the Tut as I dont think it is contradicting but perhaps could be exlpained clearer:
" Catastrophe XL reinsurance; Aggregate XL aggregated by cause, where the cause is flooding. This would protect the insurer from a large volume of claims arising due to flooding."
ioWhat the solution says is that both CatXL and Aggregate XL by cause could be considered, here is why:
Our main risk is an aggregation of claims from floding, this could happen as a result of a single event (Flood) causing a lot of damage and claims, to protect against this risk, Cat XL would be best.
Another risk faced is that a single flood event might not cause a lot of damage, however that a lot of small claims, due to regular flooding in the area causes the total claims in a period (say a year) that were as a result of flooding, to be high, in this case Aggregate XL cover by cause ( flooding) will be the right option.
Hope this makes it clearer, please shout if not yet!!