innovative instruments for transferring reinsurance business to the capital markets with the goal of refinancing or placing insurance risks.

presentation of items in the balance sheet and income statement split according to functional criteria such as business sectors and regions.

entity with specific characteristics not bound to a particular legal form that is used to conduct closely defined activities or to hold assets and for which the traditional concept of consolidation – based on voting rights – is often inadequate for determining who exercises control over the entity.

treaty between an insurer and a reinsurer that covers risks of a defined portfolio over a multi-year period.

reinsurance with limited potential for profits and losses; the primary objective is to strive for risk equalisation over time and to stabilise the cedant’s balance sheet.

form of proportional reinsurance under which the risk is not spread between the insurer and reinsurer on the basis of a previously agreed, set quota share. Instead, the insurer determines a maximum sum insured per risk up to which it is prepared to be liable. Risks that exceed the ceding company’s retention (surpluses) are borne by the reinsurer. The reinsurer’s lines thus vary according to the level of the retention and the sum insured of the reinsured contract. The reinsurer’s liability is generally limited to a multiple of the ceding company’s retention.

a reinsurance contract under which a reinsurer assumes (part of) a ceding company’s portfolio in order to relieve strain on the insurer’s policyholders’ surplus.

reflects the ratio of loss reserves to paid losses under a specific contract or several contracts in a balance sheet year.