Basics
What is Reinsurance
This type of reinsurance covers a defined class of business automatically.
What is treaty reinsurance?
The SAP account used to record amounts due from reinsurers.
What is reinsurance recoverable?
The cutoff process ensuring activity is recorded in the correct period.
What is period cutoff?
The maximum amount the ceding company keeps before reinsurance applies.
What is retention?
The company that assumes risk from the ceding company.
What is the reinsurer?
Reinsurance placed on a single risk or policy
What is facultative reinsurance?
This balance must be reconciled during month-end close.
What is reinsurance payable or receivable?
Documentation auditors use to verify balances.
What are audit schedules?
The percentage of premium paid to a reinsurer for assuming risk.
What is the cession rate?
The insurer that transfers risk to another company.
What is the ceding company?
This treaty pays losses above a specified retention.
What is excess of loss?
Losses recorded but not yet paid are called these.
What are incurred losses?
This item adjusts reinsurance assets for collectability risk.
What is an allowance for doubtful accounts?
Loss amounts recovered from reinsurers for paid claims.
What are reinsurance recoveries?
This term describes spreading risk among multiple reinsurers.
What is risk diversification?
This treaty shares premiums and losses in a set percentage.
What is quota share?
This process verifies reinsurance balances with counterparties.
What is reconciliation or confirmation?
These are estimated losses not yet reported.
What is IBNR?
This ratio measures incurred losses divided by earned premium.
What is the loss ratio?
A reinsurance structure where losses are shared proportionally.
What is proportional reinsurance?
Approval is required for each risk under this type.
What is facultative placement?
Automation reduced manual effort in this audit-heavy area.
What is the SAP reinsurance module or audit process?
Automating this process reduces audit findings and close time.
What is reinsurance reporting or reconciliation automation?
This calculation determines the reinsurer’s share under a quota share treaty.
What is ceded premium × quota share percentage?