The Coverage Ledger
Commercial Insurance & Reinsurance Intelligence
Step 7 · Reinsurance Intelligence
How insurers protect their own balance sheets.
Understand how capacity, retentions, treaties, facultative placements, catastrophe protection, and market cycles can ultimately influence original insurance.
Placement structure
Facultative vs Treaty
Treaty reinsurance covers a defined portfolio automatically; facultative reinsurance is considered risk by risk.
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Risk sharing
Proportional vs Non-Proportional
Proportional contracts share premium and losses by an agreed percentage; non-proportional contracts respond when loss exceeds an agreed retention.
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Proportional treaty
Quota Share
The cedant and reinsurer share every covered risk, premium, and loss in a fixed percentage.
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Proportional treaty
Surplus Treaty
The insurer keeps a fixed line and cedes amounts above it in a variable number of lines, subject to treaty capacity.
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Non-proportional treaty
Excess of Loss
The reinsurer pays covered loss above the cedant's retention up to the layer limit.
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Catastrophe
Catastrophe Excess of Loss
Cat XL responds to the accumulation of covered losses from one defined catastrophe event above the retention.
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Non-proportional treaty
Aggregate Covers
Aggregate protection responds when covered losses accumulate beyond a threshold across a period.
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Placement practice
Facultative Placement
A specific risk is presented to one or more reinsurers for individual underwriting and acceptance.
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Risk appetite
Retentions
Retention is the amount of risk or loss the cedant keeps for its own account before reinsurance responds.
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Limit management
Reinstatements
A reinstatement restores all or part of an exhausted excess-of-loss limit after a covered loss, often for additional premium.
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Pricing
Burning Cost
Burning cost compares historical reinsured losses with the relevant subject premium over the same exposure period.
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Market dynamics
Capacity & Market Cycles
Capacity is the amount of risk markets are willing and able to assume; hard and soft cycles describe shifts in price, terms, and availability.
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Reinsurer protection
Retrocession
Retrocession is reinsurance purchased by a reinsurer for risks it has assumed.
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Market practice
Treaty Renewals
Renewals reset price, capacity, retentions, limits, wording, data requirements, and participation for the next contract period.
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