Reinsurance Ceded

Reinsurance ceded is the amount of premium that an insurance company pays to a reinsurer. It is the portion of the risk that the insurance company transfers to the reinsurer. The amount of reinsurance ceded is determined by the reinsurer's risk appetite and the insurance company's risk management strategy.

Reinsurance ceded can be either proportional or non-proportional. Proportional reinsurance is based on a percentage of the original premium. For example, if an insurance company cedes 50% of its premium to a reinsurer, then the reinsurer will be responsible for 50% of the losses. Non-proportional reinsurance is based on a specific amount of coverage. For example, a reinsurer may agree to cover all losses above a certain amount.

Reinsurance ceded can be used to reduce the amount of risk that an insurance company assumes. It can also be used to provide additional capacity for the insurance company to write more business.

Reinsurance ceded is an important part of the insurance industry. It helps to ensure that insurance companies are able to provide coverage for a wide range of risks. It also helps to keep insurance premiums affordable for consumers.