https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AAssumed_premium 2026-06-13T14:46:36Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Assumed_premium&diff=10391&oldid=prev 2026-03-11T16:32:57Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>💰 &#039;&#039;&#039;Assumed premium&#039;&#039;&#039; is the [[Definition:Premium | premium]] income that an [[Definition:Insurance carrier | insurer]] or [[Definition:Reinsurer | reinsurer]] receives — or expects to receive — for accepting risk transferred from another insurer under a [[Definition:Reinsurance | reinsurance]] agreement. When an insurer cedes a portion of its [[Definition:Book of business | book of business]] to a reinsurer, the corresponding share of premium that flows to the reinsurer is recorded as assumed premium on the reinsurer&#039;s books, while the [[Definition:Ceding company | ceding company]] records it as [[Definition:Ceded premium | ceded premium]].<br /> <br /> 📊 The mechanics depend on the type of reinsurance arrangement. In a [[Definition:Quota share reinsurance | quota share treaty]], the reinsurer assumes a fixed percentage of every policy&#039;s premium within the defined portfolio — if the treaty cedes 30%, the reinsurer&#039;s assumed premium equals 30% of the underlying [[Definition:Gross written premium (GWP) | gross written premium]]. Under [[Definition:Excess of loss reinsurance | excess of loss]] contracts, the assumed premium is typically a negotiated flat or variable amount that compensates the reinsurer for covering [[Definition:Loss | losses]] above a specified [[Definition:Retention | retention]]. Assumed premiums appear on the reinsurer&#039;s [[Definition:Financial statement | financial statements]] and [[Definition:Statutory accounting | statutory filings]], and they must be matched against corresponding [[Definition:Loss reserve | loss reserves]] and [[Definition:Unearned premium reserve | unearned premium reserves]] to present an accurate picture of the reinsurer&#039;s obligations.<br /> <br /> 🔍 Tracking assumed premium accurately is essential for multiple stakeholders. For reinsurers, it represents top-line revenue and is a key input into [[Definition:Pricing | pricing]] adequacy analysis, [[Definition:Capital allocation | capital allocation]], and [[Definition:Solvency | solvency]] calculations. Regulators and [[Definition:Rating agency | rating agencies]] scrutinize the relationship between assumed premiums and [[Definition:Incurred loss | incurred losses]] to assess whether a reinsurer is writing business profitably and reserving appropriately. For the broader market, the volume and pricing trends in assumed premiums serve as a gauge of [[Definition:Reinsurance market | reinsurance market]] capacity and appetite — rising assumed premiums across the industry can signal either growing demand for [[Definition:Risk transfer | risk transfer]] or a hardening reinsurance cycle.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Ceded premium]]<br /> * [[Definition:Reinsurance]]<br /> * [[Definition:Gross written premium (GWP)]]<br /> * [[Definition:Quota share reinsurance]]<br /> * [[Definition:Excess of loss reinsurance]]<br /> * [[Definition:Net written premium (NWP)]]<br /> {{Div col end}}</div>

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