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📤 '''Ceded claims''' are the portion of [[Definition:Insurance claim | insurance claims]] that a [[Definition:Cedant | cedant]] — the original insurer — transfers to a [[Definition:Reinsurer | reinsurer]] under the terms of a [[Definition:Reinsurance | reinsurance]] agreement. When an insurer writes a policy and a covered loss occurs, the insurer pays the [[Definition:Policyholder | policyholder]] directly, but it then recovers part or all of that payment from the reinsurer based on the structure of the reinsurance contract. The amount recovered represents the ceded claim, and it appears on the cedant's financial statements as a reduction to its gross claims expense, often recorded as a [[Definition:Reinsurance recoverable | reinsurance recoverable]] asset.

🔄 The mechanics of ceding claims depend on the type of reinsurance arrangement in place. Under [[Definition:Proportional reinsurance | proportional reinsurance]] — such as [[Definition:Quota share | quota share]] or [[Definition:Surplus share | surplus share]] treaties — the reinsurer assumes a fixed percentage of every claim on the covered book of business, so ceded claims flow automatically as a proportion of each gross loss. Under [[Definition:Non-proportional reinsurance | non-proportional reinsurance]], such as [[Definition:Excess of loss reinsurance | excess of loss]] programs, ceded claims are triggered only when individual losses or aggregate losses exceed a specified [[Definition:Retention | retention]] threshold. The cedant typically reports ceded claims to the reinsurer through periodic [[Definition:Bordereau | bordereaux]] — detailed schedules listing individual claim transactions — or through aggregated loss advices, depending on the treaty's reporting requirements. The timing of cash settlement varies: some contracts call for prompt reimbursement on a claims-paid basis, while others settle periodically through [[Definition:Loss settlement | loss settlement]] accounts or via offset against [[Definition:Ceded premium | ceded premiums]] owed.

📊 Accurate tracking and reporting of ceded claims is essential to an insurer's financial health and regulatory standing. Regulators across major markets — whether operating under [[Definition:Solvency II | Solvency II]] in Europe, the [[Definition:Risk-based capital (RBC) | risk-based capital]] framework overseen by the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] in the United States, or [[Definition:C-ROSS | C-ROSS]] in China — scrutinize the quality and recoverability of reinsurance assets, including ceded claims. If a reinsurer becomes financially impaired or disputes a claim, the cedant remains liable to its policyholders for the full amount, meaning that [[Definition:Counterparty risk | counterparty risk]] in reinsurance directly affects the insurer's balance sheet. Under [[Definition:IFRS 17 | IFRS 17]], the treatment of ceded claims within the [[Definition:Reinsurance contract held | reinsurance contracts held]] model has added further complexity, requiring insurers to measure expected reinsurance recoveries consistently with the underlying insurance contracts. Robust data management, timely [[Definition:Bordereau | bordereau]] submission, and strong [[Definition:Reinsurance administration | reinsurance administration]] processes are therefore not merely operational niceties — they are prerequisites for sound financial reporting and effective [[Definition:Capital management | capital management]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Reinsurance recoverable]]
* [[Definition:Ceded premium]]
* [[Definition:Bordereau]]
* [[Definition:Quota share]]
* [[Definition:Excess of loss reinsurance]]
* [[Definition:Net claims]]
{{Div col end}}

Definition:Ceded claims - Revision history

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