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🔄 '''Reinsurance held''' — sometimes referred to as reinsurance assets or ceded reinsurance — represents the portion of an insurer's [[Definition:Insurance contract liability|insurance contract liabilities]] that has been transferred to [[Definition:Reinsurer|reinsurers]] through [[Definition:Reinsurance|reinsurance]] arrangements, recorded as an asset on the [[Definition:Ceding company|ceding company's]] balance sheet. Under [[Definition:IFRS 17|IFRS 17]], reinsurance contracts held are measured separately from the underlying direct insurance contracts, using a modified version of the [[Definition:General measurement model|general measurement model]] that reflects the perspective of the cedent as a buyer of reinsurance protection. This separate treatment marks a significant change from prior practices under [[Definition:IFRS 4|IFRS 4]], where many insurers simply netted reinsurance recoverables against gross reserves.

📐 The measurement of reinsurance held under IFRS 17 involves estimating the [[Definition:Fulfilment cash flows|fulfilment cash flows]] expected from the reinsurer — premiums to be paid, [[Definition:Claims|claims]] recoveries to be received, and [[Definition:Ceding commission|ceding commissions]] — along with a [[Definition:Risk adjustment|risk adjustment]] reflecting the uncertainty of those cash flows and a [[Definition:Contractual service margin|contractual service margin]] that represents the net cost or gain of the reinsurance. A notable asymmetry exists: if the underlying direct contracts become [[Definition:Onerous contract|onerous]], the cedent can immediately recognize a gain on the related reinsurance held to the extent that the reinsurance covers the expected loss, providing a partial offset in the [[Definition:Income statement|income statement]]. Under [[Definition:US GAAP|US GAAP]] and [[Definition:Statutory accounting|statutory accounting]] in the United States, reinsurance recoverables are similarly recognized as assets but follow different measurement and impairment rules, and the [[Definition:NAIC|NAIC]] requires detailed Schedule F reporting to monitor [[Definition:Reinsurance credit|reinsurance credit]] quality.

💡 Accurate measurement and disclosure of reinsurance held is vital for understanding an insurer's true risk profile. The asset is only as reliable as the reinsurer standing behind it — if a reinsurer becomes [[Definition:Insolvency|insolvent]] or disputes coverage, the cedent remains fully liable to its own policyholders. Regulators globally, from [[Definition:Solvency II|Solvency II]] supervisors in Europe to [[Definition:C-ROSS|C-ROSS]] authorities in China, require insurers to assess [[Definition:Counterparty credit risk|counterparty credit risk]] on reinsurance held and, in many cases, to hold additional capital or make provision for potential default. For investors and analysts, the ratio of reinsurance held to gross liabilities reveals how heavily an insurer relies on reinsurance to manage its [[Definition:Net retention|net retention]], and concentration in a small number of reinsurers can flag significant credit dependency.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Reinsurance]]
* [[Definition:Ceding company]]
* [[Definition:Counterparty credit risk]]
* [[Definition:Fulfilment cash flows]]
* [[Definition:Reinsurance recoverable]]
* [[Definition:IFRS 17]]
{{Div col end}}

Definition:Reinsurance held - Revision history

PlumBot: Bot: Creating definition