What is an aggregate limit in reinsurance?

An aggregate limit is a cap on how much the reinsurer will pay in total for a stated period, or for a stated set of losses, regardless of how many individual claims still look like they "should" recover. Per-risk and per-event limits can still be standing. The aggregate is the ceiling across them. Once it is gone, further recoveries on that cover are zero unless a reinstatement puts capacity back.

Operators mix this with attachment. Attachment is where a loss starts to recover. Aggregate is how much can be recovered in the pile. Treaty reinsurance wordings often carry both. Extract both.

Ceiling versus layer

Fictional walkthrough: ACME Construction Ltd, acme.example. The cedent has per-risk XoL USD 10,000,000 excess of USD 5,000,000, with an annual aggregate limit of USD 20,000,000 on that layer, period 1 January 2026 to 31 December 2026. First ACME loss: ground-up USD 12,000,000, layer pays USD 7,000,000. Second unrelated ACME-site loss: ground-up USD 18,000,000, layer would pay USD 10,000,000 but only USD 13,000,000 of aggregate remains, so the layer pays USD 13,000,000 and the aggregate is exhausted. A third loss in November recovers nothing on this cover. That is the clause working, not a claims leak you "fix" in the spreadsheet.

If the file never extracted the USD 20,000,000 aggregate, the technician will keep paying as if each ACME loss had a fresh USD 10,000,000. Reinsurer operations need a running paid-plus-outstanding against the cited aggregate, with loss dates inside the period. A bordereau total without that running view is not aggregate administration.

Do not use ACME's TIV as the aggregate. Slip TIV USD 42,000,000 versus SOV USD 47,100,000 is a schedule conflict on the original. The reinsurance aggregate is the number in the treaty. Source-grounded extraction should pull "USD 20,000,000 annual aggregate" from the page that says it, and leave a gap if the page never said it.

Types worth naming

Annual aggregate on a per-risk layer. Event aggregate on a cat layer (sometimes a sublimit per event plus a programme aggregate). Combined aggregate across several classes if the wording says so. Separate aggregates if it does not. Applying one ACME fire and one unrelated flood to a "per event" aggregate because both happened in Q3 is a definition error unless the hours clause made them one event — which, for a fire and a flood, it usually did not.

Quota share sometimes has an event limit or a loss-ratio corridor that people casually call an aggregate. Use the wording's name. A corridor is not an XoL aggregate. Booking them as if they were interchangeable is how profit commission and recoveries both come out wrong.

Exhaustion and the next treaty year

Aggregates reset on the contract period, not on your spreadsheet's tab name. An ACME loss with event date 30 December 2026 and report date 4 January 2027 is this aggregate or next according to the basis in the wording. If that basis is a gap, you cannot tell whether USD 20,000,000 still has room.

Reinstatement, if present, restores limit — sometimes the per-risk limit, sometimes the aggregate, according to the clause. Do not assume a reinstatement of the occurrence limit also reset the annual aggregate. Read the sentence. If the sentence is missing, it is a gap, not "usual market practice" typed into the accounts.