https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3APer-occurrence_excess_of_loss 2026-06-14T02:05:24Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Per-occurrence_excess_of_loss&diff=9550&oldid=prev 2026-03-11T05:32:05Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>🛡️ &#039;&#039;&#039;Per-occurrence excess of loss&#039;&#039;&#039; is a form of [[Definition:Reinsurance | reinsurance]] in which the [[Definition:Reinsurer | reinsurer]] indemnifies the [[Definition:Cedent | ceding company]] for the portion of loss from a single [[Definition:Occurrence | occurrence]] that exceeds a predetermined [[Definition:Retention | retention]] (also called the attachment point), up to a specified [[Definition:Reinsurance limit | limit]]. It is the most common non-proportional reinsurance structure for protecting insurers against large individual events — whether a major property catastrophe, a mass-casualty accident, or a significant liability verdict. The arrangement isolates severity risk: the cedent keeps routine, predictable losses and transfers the tail to the reinsurer.<br /> <br /> ⚙️ A typical placement might attach at $5 million and provide $20 million of limit, meaning the cedent absorbs the first $5 million of any one occurrence and the reinsurer pays the next $20 million. If the occurrence generates $30 million in losses, the cedent retains $5 million plus the $5 million that exceeds the reinsurance ceiling. Layers are often stacked — a primary [[Definition:Excess of loss reinsurance | excess-of-loss]] layer, a first surplus layer, and so on — with different reinsurers or [[Definition:Reinsurance syndicate | syndicates]] participating at each level. The price, expressed as a [[Definition:Reinsurance premium | reinsurance premium]] or rate on line, reflects the modeled probability that losses will penetrate the attachment point, informed by [[Definition:Catastrophe model | catastrophe models]], historical [[Definition:Loss experience | loss experience]], and [[Definition:Exposure analysis | exposure data]].<br /> <br /> 📈 This structure is indispensable for carrier [[Definition:Capital management | capital management]]. Without per-occurrence excess-of-loss protection, a single devastating event could consume an insurer&#039;s [[Definition:Surplus | surplus]] and threaten its [[Definition:Solvency | solvency]]. [[Definition:Rating agency | Rating agencies]] and [[Definition:Insurance regulator | regulators]] scrutinize the adequacy of these programs when assessing a carrier&#039;s financial strength, and the terms negotiated during [[Definition:Reinsurance renewal | renewal]] season — attachment points, limits, and pricing — serve as a barometer for the broader [[Definition:Reinsurance market | reinsurance market&#039;s]] view of risk. As loss severity trends upward across lines like [[Definition:Commercial auto insurance | commercial auto]] and [[Definition:Umbrella insurance | umbrella]], per-occurrence excess of loss remains central to how primary insurers architect their risk transfer.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Excess of loss reinsurance]]<br /> * [[Definition:Attachment point]]<br /> * [[Definition:Catastrophe excess of loss reinsurance]]<br /> * [[Definition:Retention]]<br /> * [[Definition:Proportional reinsurance]]<br /> * [[Definition:Rate on line (ROL)]]<br /> {{Div col end}}</div>

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