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📋 '''Per-occurrence excess of loss reinsurance''' is a [[Definition:Reinsurance | reinsurance]] contract structure in which the [[Definition:Reinsurer | reinsurer]] indemnifies the [[Definition:Cedent | ceding company]] for losses arising from a single covered event — such as a hurricane, earthquake, or industrial explosion — that exceed a predetermined [[Definition:Retention | retention]] threshold. This form of [[Definition:Excess of loss reinsurance | excess of loss reinsurance]] sits at the heart of [[Definition:Catastrophe reinsurance | catastrophe reinsurance]] programs and is one of the most widely purchased protections by [[Definition:Insurance carrier | primary carriers]] seeking to cap their exposure to large individual events.

⚙️ Under the contract, the cedent retains all losses from an occurrence up to the agreed attachment point — its net retention. Losses above that level, up to a specified [[Definition:Policy limit | limit]], are borne by the reinsurer. For example, a property insurer might retain the first $50 million of loss per hurricane and cede the next $200 million to a per-occurrence excess of loss treaty. The critical operational challenge lies in defining what constitutes a single "occurrence," since the [[Definition:Hours clause | hours clause]] and event-definition wording determine how individual claims are aggregated. Disputes over occurrence definition — particularly in complex scenarios like multi-day storms or sequential earthquakes — remain a recurring source of [[Definition:Reinsurance dispute | reinsurance dispute]].

💡 Without per-occurrence excess of loss protection, many insurers would struggle to write meaningful [[Definition:Property insurance | property]] or [[Definition:Casualty insurance | casualty]] books in catastrophe-exposed regions. The structure allows cedents to model their maximum retained loss with relative precision, which in turn supports their [[Definition:Capital adequacy | capital adequacy]] calculations and [[Definition:Rating agency | rating agency]] assessments. The pricing of these layers is heavily influenced by [[Definition:Catastrophe model | catastrophe models]], historical loss experience, and prevailing [[Definition:Reinsurance market cycle | market conditions]]. As climate-related volatility intensifies, demand for this coverage continues to grow, and the layers closest to expected loss — the lower attachment points — command the highest [[Definition:Rate on line (ROL) | rates on line]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Excess of loss reinsurance]]
* [[Definition:Catastrophe reinsurance]]
* [[Definition:Retention]]
* [[Definition:Hours clause]]
* [[Definition:Aggregate excess of loss reinsurance]]
* [[Definition:Rate on line (ROL)]]
{{Div col end}}

Definition:Per-occurrence excess of loss reinsurance - Revision history

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