Losses occurring basis
A treaty covering losses occurring during its period, regardless of the inception date of the underlying policies.
A losses occurring treaty covers losses that occur during its period, regardless of when the underlying policies were issued. An annual policy written in October is therefore covered by two successive treaties: by the current year's until December 31, then by the following year's. It is the normal basis for non-proportional cover and for all catastrophe reinsurance, because it aligns the cover period with the risk season, which is exactly what a treaty underwriter wants to control. The reinsurer can read its exposure at a glance: only events dated inside its window count, and it need not track the cedant's policy portfolio. The trade-off: it inherits risks written before its time, on terms it never saw. Hence the reinsurer's close watch on any late-year drift in underwriting, and the clauses restricting changes in underwriting policy during the treaty period.
A losses occurring catastrophe treaty runs from January 1 to December 31, 2026. A February 14 windstorm falls to that treaty, including damage to policies written in March 2025. Conversely, a policy issued on December 1, 2026, is covered by the 2026 treaty through December 31, then by the 2027 treaty for the remaining eleven months, on terms and with reinsurers that may be entirely different.
losses occurring basis, LOD, losses occurring during
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