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🔁 '''Per-occurrence reinsurance''' is a form of [[Definition:Reinsurance | reinsurance]] in which the [[Definition:Reinsurer | reinsurer's]] liability is triggered by the total loss from a single covered [[Definition:Occurrence | occurrence]] exceeding a specified [[Definition:Retention | retention]] (also called an attachment point), with the reinsurer then paying up to a defined limit for that event. This structure is the backbone of [[Definition:Excess of loss reinsurance | excess of loss]] treaty programs, allowing [[Definition:Ceding company | ceding companies]] to protect their balance sheets against the outsized financial impact of large individual losses or catastrophic events. The approach contrasts with [[Definition:Aggregate reinsurance | aggregate reinsurance]], which responds to cumulative losses over a period, and with [[Definition:Proportional reinsurance | proportional reinsurance]], which shares every loss from the first dollar according to a fixed percentage.

⚙️ A typical per-occurrence excess of loss treaty might read "$10 million excess of $5 million per occurrence," meaning the [[Definition:Ceding company | cedent]] retains the first $5 million of each occurrence loss, and the reinsurer covers up to $10 million above that threshold. The definition of "occurrence" in the reinsurance contract is paramount — and often differs subtly from the underlying [[Definition:Insurance policy | insurance policy]] language — since it determines whether related losses are grouped together or treated independently. For [[Definition:Catastrophe reinsurance | catastrophe reinsurance]], an occurrence typically encompasses all losses from a single natural disaster within a defined time window (often 72 to 168 hours for windstorm events). Pricing relies on [[Definition:Catastrophe modeling | catastrophe models]], historical loss data, and [[Definition:Exposure analysis | exposure analysis]], with terms negotiated in major reinsurance markets including London, Bermuda, Zurich, and Singapore. Regulatory frameworks such as [[Definition:Solvency II | Solvency II]] grant capital relief to cedents for [[Definition:Risk transfer | risk transfer]] achieved through qualifying per-occurrence treaties, provided the arrangement meets specific standards around genuine risk transfer and documentation.

💡 Per-occurrence reinsurance enables insurers to write business that would otherwise concentrate too much risk on a single event — a hurricane, an industrial explosion, or a mass tort — relative to their [[Definition:Surplus | surplus]]. Without it, many primary insurers would be unable to offer the [[Definition:Per occurrence limit | per occurrence limits]] that commercial and industrial policyholders require. The structure also plays a critical role in stabilizing industry results after major [[Definition:Catastrophe loss | catastrophe losses]]: when a devastating earthquake or windstorm strikes, per-occurrence reinsurance treaties spread the financial burden across a global pool of reinsurers and [[Definition:Insurance-linked securities (ILS) | ILS]] investors. The clarity of the per-occurrence trigger — one event, one recovery — makes it the most transparent and widely understood reinsurance structure, serving as the default building block of most non-proportional [[Definition:Reinsurance program | reinsurance programs]] worldwide.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Excess of loss reinsurance]]
* [[Definition:Catastrophe reinsurance]]
* [[Definition:Retention]]
* [[Definition:Aggregate reinsurance]]
* [[Definition:Per occurrence limit]]
* [[Definition:Reinsurance program]]
{{Div col end}}

Definition:Per-occurrence reinsurance - Revision history

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