A treaty covering every policy written during its period through to that policy's expiry, even beyond its own.
A risk attaching treaty covers every policy issued or renewed during its period and follows each to its own expiry, including after the treaty itself has ended. A 2026 treaty therefore protects a policy written in November 2026 through to November 2027. It is the normal basis for proportional treaties, quota share and surplus, because it aligns the cession of premium with the cession of risk: the reinsurer receives a fraction of the policy's premium and carries the matching fraction of its losses, for the policy's whole term. The problem it solves is the economic coherence of proportional business, which a losses occurring basis would break by charging one reinsurer with losses whose premium another collected. The trade-off is spreading: a risk attaching treaty stays exposed for up to twenty-four months after inception, which complicates reading a single year and requires the portfolio to be tracked by underwriting year rather than by accounting year.
A 2026 quota share at 40 percent covers a fleet policy written on December 15, 2026 for twelve months. A loss on September 3, 2027 still falls to that treaty, while the 2027 quota share has been in force for nine months. At December 31, 2027 the cedant still carries 2.8 million euros of unearned premium attaching to the 2026 treaty, and its reinsurance statements keep the two underwriting years apart.
Risk attaching basis, RAD, Base rattachement, Policies attaching, Risks attaching during