Reinsurance Types

Retrocession

Definition

Reinsurance purchased by a reinsurer to protect their own portfolio. The reinsurer becomes the cedent, transferring risk to another reinsurer (the retrocessionaire).

Practical Example

A reinsurer buying $200M CAT XoL protection from a retrocessionaire.

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Related Terms

Market Participants
Retrocessionaire

A reinsurer that accepts retrocession business from another reinsurer. Provides reinsurance to reinsurers.

Market Participants
Reinsurer

Company that accepts insurance risk transferred from cedents. Provides capacity and risk diversification to the insurance market.

More in Reinsurance Types

Facultative ReinsuranceTreaty ReinsuranceProportional ReinsuranceNon-Proportional ReinsuranceFinite ReinsuranceLoss Portfolio Transfer
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