Ceding Party
Definition
- In the reinsurance industry, the ceding party is the insurance company spreading insurance obligations to the reinsurer in order to lower risk. Also known as the "cedent", the term "ceding party" is also used outside of the reinsurance industry and applies to any party looking to mitigate risk by passing financial obligations to an insurer.
Synonyms
cedent, obligors, assignor of claims, spread amongst parties
Related Terms and Acronyms
- Approved for Reinsurance — Definition,
- A company that is certified to provide reinsurance in a certain area.
- Finite Reinsurance — Definition,
- A reinsurance arrangement where the reinsurer only takes on a limited amount of risk from the ceding party.
- Reinsurance — Definition,
- The process of one insurance company sharing liabilities from an insurance policy with another insurance company in order to lessen exposure, or in other words, insurance for insurers.
- Reinsurance Ceded — Definition,
- The amount of insurance that is reinsured with another insurance company.
- Reinsurance Recoverables to Policyholder Surplus — Definition,
- A method used to determine how much an insurer relies on reinsurance.
- Reinsurer — Definition,
- An insurance company that provides coverage for a portion of another insurance company's risk.
- Underlying Retention — Definition,
- The liability an insurance company still retains after ceding liability to a reinsurer.
