The entries by which a proportional treaty takes on or hands over in-force premium and losses at the change of year.
Portfolio in and portfolio out are the two symmetrical entries that give effect to a clean cut. On the way out, the expiring treaty pays the incoming reinsurers the value of the liabilities it passes to them: unearned premium on policies still in force and reserves for unsettled claims. On the way in, the new treaty receives those same amounts and assumes the matching liabilities. The problem they solve is continuity of cover for the cedant, whose policies do not stop on December 31 although its treaties do. Without these entries, an annual policy written in July would straddle two treaties with two different panels, each having received only part of the premium. The transfer rate applied to unearned premium and the valuation method used for reserves are the two parameters deciding who gains, and a panel that turns over heavily from one year to the next makes that negotiation sharper still, since the interests facing each other are no longer the same.
At the 2026 renewal a cedant replaces 35 percent of its quota share panel. The outgoing portfolio is valued at 44.5 million euros, of which 15.6 million changes hands between outgoing and incoming reinsurers. The incoming parties obtain a 4 percent discount on the loss reserves, that is 1 million euros, in exchange for taking the transferred files without a prior audit.
Portfolio in, Portfolio out, Portefeuille entrant, Portefeuille sortant, Portfolio transfer proportionnel