The Global Risks Alliance (GRA)
Reinsurance lets insurers pass part of their risk to reinsurers, limiting large and accumulated losses and freeing capital. Programmes combine proportional quota shares and surplus treaties with excess-of-loss layers, facultative cover for single risks and catastrophe cover for events. This page sets out how structures transfer risk, where gaps and disputes arise, how the market is measured and who decides.
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Reinsurance structures are the contract forms through which insurers pass risk to reinsurers: proportional quota shares and surplus treaties, non-proportional excess-of-loss layers and facultative cover. Wording, renewal timing and counterparty quality shape what is transferred. Insurer boards, reinsurers and supervisors hold the decisions.
The working screen behind this subject: its structure, terms and states. Names are placeholders and values illustrative.
Reinsurance structures · Cedent C-07 · Peril: tropical cyclone
| Retention | 0 | 50 | n/a | |
| Layer 1 | 44 | 100 | 9 | 1-in-11 |
| Layer 2 | 138 | 159 | 3 | 1-in-43 |
| Layer 3 | 384 | 268 | 0.9 | 1-in-221 |
Treaty and facultative risk-sharing concepts. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
Excess-of-loss programmes split the loss into retention and layers. Each layer has its own price, reinstatement terms and reinsurers, so a large event can exhaust one layer and leave another untouched.
Hours clauses, event definitions and aggregation language decide whether many claims count as one loss or several. Ambiguity after a complex event becomes a dispute.
Many treaties renew on a few dates. Capacity and price set at those renewals pass quickly into primary insurance prices and availability.
Reinsurance is only as good as the reinsurer's ability to pay. Collateral, ratings, diversification across reinsurers and supervisory rules address it.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Quota share | Proportional reinsurance in which a fixed share of premiums and losses on every policy is ceded. |
| Retention | The part of a loss the ceding insurer keeps before reinsurance responds. |
| Facultative reinsurance | Reinsurance of a single risk negotiated individually, as opposed to a treaty covering a portfolio. |
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Reinsurance cession ratio | ceded premium as a percent of gross premium | annual | Statutory financial statements | OFFICIAL |
| Catastrophe excess-of-loss rate-on-line | premium as a percent of limit | at main renewal dates | Broker renewal reports | REPORTED |
| Retention as a share of capital | percent | annual | Insurer disclosures | DECLARED |
| Global reinsurance capital | currency | semi-annual | Broker and industry reports | REPORTED |
| Reinsurance recoverables by counterparty rating | currency by rating band | annual | Statutory schedules | OFFICIAL |
| Reinsurance disputes and arbitrations | count | annual | Court and arbitration records where public | REPORTED |
The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.
Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| Gallagher Re 1st View and broker renewal reports | Price and terms at main renewal dates | Proprietary, published reports free to read |
| AM Best and S&P global reinsurance reports | Market capital, results and rated reinsurers | Proprietary, summaries free to read |
| NAIC Schedule F data | United States reinsurance recoverables by counterparty | Detailed data under NAIC licence; summaries public |
| EIOPA Solvency II reinsurance statistics | Reinsurance use by EU insurers | Free, EU reuse terms |
| IAIS Global Insurance Market Report | Sector monitoring including reinsurance | Free, IAIS terms |
Reinsurance and Catastrophe prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Insurer boards and chief risk officers | How much risk to retain and how to structure reinsurance | Retention practice, pricing and counterparty evidence |
| Reinsurer underwriting committees | Which layers to write and at what terms | Exposure data, loss history and model output |
| Insurance supervisors | Whether reinsurance gives real risk transfer and credit for capital | Contract terms, counterparty quality and collateral |
| Arbitrators and courts | How event and aggregation clauses apply to a loss | Contract wording and loss records; the page serves context only |
Treaty reinsurance covers a defined portfolio of policies, such as all property policies in a region, under agreed terms. Facultative reinsurance covers individual risks, typically large or unusual ones, negotiated case by case.
Proportional reinsurance shares premiums and losses in a fixed ratio. Non-proportional reinsurance, such as excess-of-loss, pays when losses exceed a threshold, the attachment point, up to a limit. Catastrophe excess-of-loss covers losses from a single event above the attachment, and is central to catastrophe risk management. Aggregate covers respond to total losses over a period.
Terms matter in clustered seasons. Reinstatement provisions determine whether cover is restored after a loss and on what terms, which affects protection if several events occur in one year.
Applying structure terms to simulated losses, using actuarial mathematics. Results depend on the underlying catastrophe model.
Examining how structures affect extreme losses, using extreme value theory.
Comparing protection with actual losses. Data on actual recoveries are limited.
Understanding how terms such as event definitions affect cover. Interpretation can be disputed.
This topic explains concepts. It does not compare market offerings or recommend structures for any institution.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.