https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ACededDefinition:Ceded - Revision history2026-05-02T08:24:16ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Ceded&diff=7370&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-10T12:51:35Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📤 '''Ceded''' describes the portion of [[Definition:Risk | risk]], [[Definition:Premium | premium]], or [[Definition:Loss | loss]] that an [[Definition:Insurance carrier | insurer]] has transferred to a [[Definition:Reinsurer | reinsurer]] through a [[Definition:Reinsurance | reinsurance]] agreement. When an insurer reports "ceded premiums" on its financial statements, it is identifying the share of written or earned premiums passed along to reinsurers — a figure that directly reduces the insurer's [[Definition:Net premium | net premium]] income but also reduces its net exposure to [[Definition:Claim | claims]]. The term functions as both an accounting descriptor and a marker of how aggressively a company uses reinsurance to manage its [[Definition:Risk appetite | risk appetite]].<br />
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⚙️ In practice, ceded amounts flow through structured contractual mechanisms. Under a [[Definition:Quota share reinsurance | quota share]] arrangement, a fixed percentage of premiums and losses is ceded on every qualifying policy, making the calculation straightforward. [[Definition:Excess of loss reinsurance | Excess of loss]] treaties work differently: premiums are ceded as a flat or calculated charge, while losses are only ceded once they breach a defined [[Definition:Retention | retention]] threshold. The [[Definition:Cedant | cedant]] records ceded premiums as a deduction from [[Definition:Gross written premium (GWP) | gross written premiums]] to arrive at [[Definition:Net written premium (NWP) | net written premiums]], and ceded losses offset gross incurred losses on the income statement. These entries must reconcile with [[Definition:Bordereaux | bordereaux]] submitted to reinsurers and are subject to audit under most [[Definition:Binding authority agreement | binding authority agreements]] and treaty contracts.<br />
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📈 Analysts and [[Definition:Insurance regulator | regulators]] pay close attention to the ratio of ceded premiums to gross premiums — sometimes called the [[Definition:Cession ratio | cession ratio]] — as a barometer of an insurer's dependency on reinsurance. A high ceded percentage may indicate that the insurer is writing business it cannot comfortably retain, while a very low figure could suggest under-utilization of available [[Definition:Reinsurance capacity | capacity]] and concentrated exposure to [[Definition:Catastrophe risk | catastrophe events]]. [[Definition:Credit rating agency | Rating agencies]] factor ceded figures into their assessments of an insurer's net leverage and [[Definition:Capital adequacy | capital adequacy]]. Ultimately, the balance between what is ceded and what is retained shapes an insurer's [[Definition:Underwriting | underwriting]] strategy, profitability profile, and resilience under stress scenarios.<br />
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'''Related concepts'''<br />
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* [[Definition:Cedant]]<br />
* [[Definition:Ceding commission]]<br />
* [[Definition:Net written premium (NWP)]]<br />
* [[Definition:Gross written premium (GWP)]]<br />
* [[Definition:Retention]]<br />
* [[Definition:Reinsurance]]<br />
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