Sliding Scale Commission
Definition
A ceding commission that varies based on loss experience, incentivizing the cedent to maintain profitable underwriting.
Practical Example
Commission ranges from 25% to 35% based on loss ratio performance.
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Related Terms
Commission paid by the reinsurer to the cedent on proportional treaties to compensate for acquisition costs and expenses.
Additional commission paid to the cedent when a proportional treaty produces underwriting profit for the reinsurer.
Ratio of incurred losses to earned premiums, expressed as percentage. Key profitability metric for insurance and reinsurance.