Ceded losses
The portion of gross losses borne by reinsurers under the applicable treaties.
Ceded losses are the amounts reinsurers must pay the cedant under the treaties. The calculation depends on the program type: under quota share the reinsurer shares proportionally in each loss; under XL it responds only above the retention. Net losses are gross losses minus ceded losses. Recovery is only as good as the reinsurers' solvency, so the panel should be diversified and counterparty risk monitored.
Hypothetical case: 5 XS 5 M EUR treaty and a 9 M EUR loss. Ceded losses are 4 M EUR (the slice between 5 and 9 M), net losses 5 M EUR (the retention).
ceded losses, reinsurance recoveries, ceded claims
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