https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AAutomatic_reinsuranceDefinition:Automatic reinsurance - Revision history2026-06-14T05:38:59ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Automatic_reinsurance&diff=10404&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-11T16:33:48Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>🔄 '''Automatic reinsurance''' is a [[Definition:Reinsurance | reinsurance]] arrangement under which a [[Definition:Ceding company | ceding company]] is obligated to cede, and a [[Definition:Reinsurer | reinsurer]] is obligated to accept, all risks that fall within pre-agreed parameters — without the need for individual risk-by-risk approval. Unlike [[Definition:Facultative reinsurance | facultative reinsurance]], where each risk is separately offered and underwritten, automatic reinsurance operates under a standing [[Definition:Reinsurance treaty | treaty]] that defines the classes of business, territorial scope, retention levels, and capacity limits in advance.<br />
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⚙️ The mechanics hinge on the treaty's terms. Once the [[Definition:Reinsurance treaty | treaty]] is bound, every [[Definition:Policy | policy]] written by the ceding insurer that meets the treaty's eligibility criteria is automatically covered — the cedent doesn't submit individual submissions, and the reinsurer doesn't review them one by one. Common structures include [[Definition:Quota share reinsurance | quota share]] arrangements, where a fixed percentage of every qualifying risk is ceded, and [[Definition:Surplus reinsurance | surplus treaties]], where the cedent retains a set amount and cedes the excess up to the treaty's limit. [[Definition:Bordereaux | Bordereaux]] reports are exchanged periodically so the reinsurer can monitor the portfolio's composition, [[Definition:Loss ratio (L/R) | loss ratio]], and emerging trends.<br />
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💡 For primary insurers, automatic reinsurance provides predictable [[Definition:Capacity | capacity]] and streamlines operations — underwriters can bind business knowing protection is already in place, which accelerates the quoting and issuance process. Reinsurers, in turn, gain access to diversified premium volume without the transaction costs of reviewing each risk individually, though they rely heavily on the cedent's [[Definition:Underwriting | underwriting]] discipline and the treaty's contractual guardrails. The relationship is built on trust and transparency: if a cedent's underwriting standards deteriorate, the reinsurer bears the consequences until the treaty comes up for renewal. This dynamic makes automatic reinsurance a cornerstone of the global risk-transfer system and one of the most significant commitments a reinsurer can make.<br />
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'''Related concepts:'''<br />
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* [[Definition:Reinsurance treaty]]<br />
* [[Definition:Facultative reinsurance]]<br />
* [[Definition:Quota share reinsurance]]<br />
* [[Definition:Surplus reinsurance]]<br />
* [[Definition:Ceding company]]<br />
* [[Definition:Bordereaux]]<br />
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