Scroll Top

search-icon
    drop-arrow

    Reinsurance Ceded

    Introduction

    Reinsurance ceded is a portion of risk which a reinsurer would receive from the previous insurer of the insured. This would let the primary insurance company minimise its risk by passing on the policy that it has underwritten to another insurance provider.

    The primary insurers are called as the ceding company while the reinsurer is referred to as accepting company. The reinsurance company would receive the payment of a premium in exchange for the risk it is going to assume and is liable to pay the claim for the risk it has taken up.

    Understanding Reinsurance Ceded

    Reinsurance is an integral part of the insurance sector. Under this practice, the insurance companies are going to transfer a part of their portfolio to other companies. Doing this has allowed insurers to cede a portion of the risk they assumed to other companies and thereby reducing their overall liability and risk.

    This has also provided them with a means to stay solvent even when they are liable to pay out a huge sum as a part of a claim filed by an insurer. Furthermore, insurers will maintain premiums lower for their customers or policyholders and thereby luring more individuals to avail their services.

    Benefits

    Ceding of reinsurance provides the ceding insurance company with more security for their solvency, equity, and more stability at times of unprecedented developments in the market.

    Reinsurance ceding will also permit the insurance companies with the liberty to underwrite policies covering a larger extent of risks with no excessive rise in the cost to cover solvency margins or the value at which the securities of the insurer exceeds liabilities and other financial commitments.

    The process of reinsurance ceding enables the availability of considerable liquid assets for the insurance providers at times when there are considerable losses.

    Popular Topics

    Latest Articles

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption