Proportional Reinsurance
Definition
Reinsurance where premiums and losses are shared between cedent and reinsurer based on an agreed percentage. Includes quota share and surplus treaties.
Practical Example
A 30% quota share where the reinsurer receives 30% of premiums and pays 30% of all losses.
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Related Terms
A proportional treaty where the reinsurer accepts a fixed percentage of all policies within the treaty scope. Simple and automatic coverage.
A proportional treaty where the cedent retains a fixed amount per risk and cedes the surplus to reinsurers. Provides flexibility for varying policy sizes.
Commission paid by the reinsurer to the cedent on proportional treaties to compensate for acquisition costs and expenses.