https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ACeded_premium 2026-06-13T10:26:56Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Ceded_premium&diff=6735&oldid=prev 2026-03-10T04:44:13Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>💰 &#039;&#039;&#039;Ceded premium&#039;&#039;&#039; is the portion of [[Definition:Premium | premium]] that an [[Definition:Insurance carrier | insurance carrier]] pays to a [[Definition:Reinsurance | reinsurer]] in exchange for the reinsurer assuming a defined share of the underlying risk. When a primary insurer writes a [[Definition:Policy | policy]] and then transfers part of that exposure through a [[Definition:Reinsurance | reinsurance]] contract, the premium flowing outward to the reinsurer is the ceded premium — it represents the economic cost of shifting risk off the insurer&#039;s own balance sheet.<br /> <br /> 📑 The mechanics depend on the type of reinsurance arrangement. Under a [[Definition:Quota share reinsurance | quota share treaty]], the [[Definition:Cedent | cedent]] cedes a fixed percentage of premiums on every policy falling within the treaty&#039;s scope, typically receiving a [[Definition:Ceding commission | ceding commission]] in return to offset [[Definition:Acquisition cost | acquisition costs]]. In [[Definition:Excess of loss reinsurance | excess-of-loss]] structures, ceded premium takes the form of a negotiated rate or flat amount rather than a proportional share. Regardless of structure, ceded premiums are recorded on the cedent&#039;s financial statements and reduce [[Definition:Net written premium | net written premiums]], directly affecting reported revenue, [[Definition:Combined ratio | combined ratios]], and [[Definition:Solvency | capital adequacy]] metrics.<br /> <br /> 🔍 Tracking ceded premiums matters far beyond accounting. The ratio of ceded to [[Definition:Gross written premium (GWP) | gross written premiums]] signals how much risk an insurer retains versus transfers, giving regulators, rating agencies, and investors a window into the company&#039;s risk appetite and its dependence on the reinsurance market. A sharp increase in ceded premiums after a year of heavy [[Definition:Catastrophe loss | catastrophe losses]] can indicate that an insurer is de-risking, while a declining ratio may suggest growing confidence — or, in some cases, difficulty obtaining affordable [[Definition:Reinsurance | reinsurance]] capacity.<br /> <br /> &#039;&#039;&#039;Related concepts&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Cedent]]<br /> * [[Definition:Ceding commission]]<br /> * [[Definition:Cession]]<br /> * [[Definition:Reinsurance]]<br /> * [[Definition:Net written premium]]<br /> * [[Definition:Gross written premium (GWP)]]<br /> {{Div col end}}</div>

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