The premium top-up computed at period end when the actual base exceeds the one used for the deposit.
An adjustment premium is the balance owed by the cedant when the actual base of a non-proportional treaty, known only after close, exceeds the projected base on which the minimum and deposit premium was calculated. It is computed by applying the contractual rate to the reported base and deducting what has already been paid. The problem it solves is pricing an exposure unknown when the contract incepts: a treaty covers a portfolio that will grow or shrink over twelve months, and fixing the final premium up front would overcharge a contracting cedant or undercharge a fast growing one. Adjustment restores proportionality between exposure and premium. Its mechanics impose reporting discipline: the cedant must produce the base within the contractual deadline, usually ninety days after close, and failure to report lets the reinsurer estimate it unilaterally, almost always in its own favor.
A motor cedant reports a 2026 base of 212 million euros against 180 million projected. At the contractual rate of 3.1 percent the final premium is 6.57 million, of which 5.58 million has already been paid as minimum and deposit premium. The adjustment premium due is 990,000 euros, payable within sixty days. A late report would have let the reinsurer apply a deemed base of 230 million.
Adjustment premium, Prime complémentaire, Prime définitive, Premium adjustment