Transaction whereby a reinsurer agrees to cover part of a risk already underwritten or accepted by an insurer. The opposite of cession.

The accounting year in which loss events occur.

The company’s financial year in which the accounts are recorded. Because of the time required to transfer information for a given period of cover, the ceding company’s accounting year may differ from that of the reinsurer. For reinsurers such as SCOR wishing to calculate their results more rapidly, estimates are made for the accounts of ceding companies for the last quarters not yet received at closing date.

All the risks that could be hit by the same event or all the underwritten lines regarding the same risk.

Specialist who applies probability theory to Life and Non-Life (property) insurance and reinsurance in order to measure risks and calculate premiums, as well as technical or mathematical reserves.

Reserves for claims are recorded in the accounting system for the amount communicated by the cedants. They can be topped up for amounts calculated according to past experience, to take into account estimated future adverse developments.

Losses for which initial estimates prove insufficient.

The amount of losses above which excess of loss reinsurance becomes operative.

"Best estimate" is equal to the expected value of future potential cash-flows (probability weighted average of distributional outcomes) related to prior underwritten business, based upon current and credible information, having due regard to all available information and reflecting the characteristics of the underlying portfolio."

Insurance primarily concerned with the losses caused by injuries to third persons (in other words, persons other than the policyholder) and the legal liability imposed on the insured resulting therefrom.

A high-perfomance bond generally issued by an insurance or reinsurance company. If a predefined occurrence takes place (such as an earthquake, tsunami, hurricane etc.), the bondholder loses all or part of the interest, and possibly even the nominal value, of the bond. This product enables insurance and above all reinsurance companies to procure third party support for part of the risk linked to these exceptional events, thereby reducing their own risks.

Insurance company, mutual society or provident insurance provider that transfers (or lays off) a part of the risk it has underwritten to a reinsurer.

Transaction whereby an insurer (cedant or ceding company) either mandatorily or facultatively transfers part of its risk to the reinsurer, as opposed to the concept of acceptance.

Ratio of claims incurred and evaluated, and of IBNR reserves to earned premiums.

A homogeneous category of insurance. Since 1985, French reinsurers have utilised a uniform presentation that distinguishes between life, fire, crop hail, credit and surety, other risks, third party liability, motor, marine and aviation classes. The last eight of these form the general class of Non-Life business. English-speaking markets generally distinguish between Property (damage to goods) and Casualty (liability insurance and industrial injury), and Life business.

Sum of operating expenses, commissions payable, claims incurred and additional reserves to earned premiums.

Operation through which the ceding company takes back the risks ceded to the reinsurer.

Credit insurance provides cover against loss to a supplier caused by customer insolvency. Surety insurance is a commitment to a bondholder to substitute for his debtor in case of default by the latter.

Decennial insurance provides cover to building owners and construction companies against losses caused by structural defects in new buildings resulting from inherent defects in design, construction or the materials employed. In a number of countries, including France, such coverage is required as a matter of law. It is generally granted for a period of ten years after construction is completed.

Amount occasionally deposited with the ceding company to guarantee the reinsurer's liability. Income from securities deposited accrues to the reinsurer.

A policy written with an insurer by an individual or a company to cover a risk (property, service or person). This policy can either be underwritten directly with one of the insurer's agents or via a broker who receives a commission.

Fraction of the premium corresponding to the expired portion of time for which the reinsured policy(ies) was/were in effect. The unearned portion of premiums is recorded in the premium reserve and carried under technical reserves.

"Entreprise Risk Management is a process, effected by an entity's Board of directors, management and other personel, applied in strategy setting and across the entreprise, designed to identify potential events that may affect the entity, and manage risks o be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives".

Aggregation of claims having a common fortuitous origin and affecting either a single insured under more than one policy, or more than one insured.

Reinsurance on an item-by-item, risk-by-risk basis. Facultative reinsurance is usually written for very large-line risks. It may be either proportional or non-proportional.

Goodwill is the intangible asset of a company (i.e. strategic positioning, reputation on the market, etc.). The calculation of goodwill is one of the methods used to financially evaluate a company and its capacity to create wealth.

Premiums received. Gross premiums represent premium income for the year.

A single insurance policy that provides cover for several persons forming a homogeneous group, and generally belonging to the same company or association, against certain risks such as death, accident, sickness.

Primary insurer and first signatory of an insurance policy in a co-insurance. The signatory company defines the clauses and the conditions of the policy.

Profit earned on liquidation of technical reserves on settlement of a claim or expiration of a Treaty.

Event that triggers insurance cover and reserves noticing.

Reinsurance that absorbs the losses immediately above the reinsured's retention layer. A low layer excess of loss reinsurer will pay up to a certain monetary amount at which point a higher layer reinsurer or the ceding company will be liable for additional losses. Also known as working layer reinsurance.

Insurance covering damage occasioned during carriage (by sea, river, land, or air) to the means of transport ("hull"), excluding motor-driven land vehicles, and to the goods carried ("cargo"), and third party liability incurred by the carrier.

Amount that a Life insurance or capitalisation company must set aside and capitalise in order to meet its commitments to the insured.

The relative incidence of death of Life insureds or annuitants holding a Life insurance policy.

Reinsurance contract written to protect the ceding company from all or part of claims in excess of a specified amount retained (priority). This generally takes the form of Excess of Loss (or XL) or excess of annual loss reinsurance.

Initially, this concerned a multi-year, multi-line form of reinsurance whose contract terms included an aggregate limit of liability and loss sensitive features (e.g. profitsharing or additional premium). Nowadays it also encompasses technical and investment accounts within a single cover, securitisation of insurance risks, credit derivatives, and climate derivatives.

Reserve for claims reported but not yet settled. These are estimated by ceding companies and communicated to the reinsurer.

All political or administrative events, actions or decisions that could lead to losses for companies contracting or investing abroad.

Premium written by an insurer after deduction of cancelled premiums.

Gross premiums less the portion of premiums paid for retrocession. As opposed to gross premiums.

An insurance company that issues insurance contracts to the public generally or to certain non-insurance entities.

The estimated anticipated maximum loss, taking into account ceding company and contract limits, caused by a single catastrophe affecting a broad contiguous geographic area, such as that caused by a hurricane or earthquake of such a magnitude that it is expected to recur once during a given return period, such as every 50, 100 or 200 years.

All insurance classes other than Life.

Insurance that provides coverage to a person with an insurable interest in tangible property for that person's property loss, damage or loss of use.

Reinsurer's share of claims carried by the insurer in proportion to its share of premiums received. Proportional reinsurance is generally written as a quota share of business or as surplus reinsurance.

Premium equal to the technical estimate of the risk covered by the insurer.

Scale showing the various premium rates applied to risks belonging to a given category of insurance (as in motor rates, fire rates).

A provision in an excess of loss reinsurance contract, particularly catastrophe and clash covers, that provides for reinstatement of a limit that had been reduced by the occurrence of a loss or losses. The number of times that the limit can be reinstated varies, as does the cost of the reinstatement.

Additional premiums charged under certain excess of loss reinsurance contracts to restore coverage amounts after a loss.

Procedure whereby an insurer insures himself with an outside company (the reinsurer) for part or all of the risks covered by him, in return for payment of a premium.

Percentage of premiums paid by the reinsurer to the insurer in quota-share or facultative treaties as a contribution to the acquisition and administrative costs relating to the business ceded.

All the clauses included in the reinsurance treaty. In economic terms, "reinsurance conditions" cover the rates established for the commission, the share in profits, the frequency of presentation of accounts and payment of interest on the deposits, or on the absence of deposits, which together determine the reinsurers' probable profit margin.

The total reinsurance business (Treaty and Facultative) written and managed by a reinsurance company.

Amount received by the reinsurer as a consideration for covering a risk.

Reinsurance convention between an insurer and a reinsurer defining the terms under which the risks covered by the convention are ceded and accepted. The two main categories of treaty reinsurance are proportional and non-proportional.

Company that undertakes to cover the portion of a risk ceded to it by the insurer.

The amount of capital, calculated by the internal capital model, required to cover all of the Group’s known risk exposures. The amount is calculated with reference to a risk measure at a selected threshold (e.g. 99% Tail Value at Risk ).

Reserves intended to cover the portion of the cost of claims not covered by the unearned premiums reserve, for the period between the accounts closing date and the contract expiration date.

Share of the risk retained by the insurer or reinsurer for its own account.

Transaction in which the reinsurer transfers (or lays off) all or part of the risks it has assumed to another reinsurer, in return for payment of a premium.

Company that accepts a retroceded risk.

Property or person insured.

Halt to all underwriting of new business on a risk portfolio, as a result of which reserves are run off over time until their complete extinction. Run off may take up to several decades depending on the class of business.

The period of time that elapses between either the writing of the applicable insurance or reinsurance policy or the loss event (or the insurer's or reinsurer's knowledge of the loss event) and the payment in respect thereof. A "short-tail" product is one where ultimate losses are known comparatively quickly; ultimate losses under a "long-tail" product are sometimes not known for many years.

Amounts that an insurer or reinsurer must place in reserves in order to pay out on claims insured, and on liabilities arising from policies written.

Decision by an insurer or a reinsurer to accept to cover a risk upon collection of a premium.

The maximum amount that an insurance or reinsurance company can underwrite. The limit is generally determined by the company's retained earnings and investment capital. Reinsurance serves to increase a company's underwriting capacity by reducing its exposure to particular risks.

Pattern in which Property and Casualty insurance and reinsurance premiums, profits and availability of coverage rise and fall over time.

The aggregate of policy acquisition costs, including commissions, and that portion of administrative, general and other expenses attributable to underwriting activities.

An underwriting year reinsurance contract reinsures losses incurred on underlying insurance policies that begin at any time during the reinsurance contract term. This means, for example, that if both the underlying insurance contracts and the reinsurance contract have twelve-month terms, the reinsurance contract will cover underlying losses occurring over a twenty-four month period.

For each reinsurance contract, these cover the portion of premiums written during the year relating to the period between the balance sheet closing date and the date at which the reinsurance contract expires.

Life insurance contract or capitalisation certificate for which the amount guaranteed and bonus amounts are expressed, not in a specific euro amount, but by reference to one or more units of account such as mutual fund units or real estate investment trust units. Contractual guarantees are directly linked to upward or downward variations in a security listed on a regulated market or in the value of a real estate asset.