What Does Automatic Proportional Reinsurance Mean?

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What does Automatic Proportional Reinsurance mean? Read on to discover the definition & meaning of the term Automatic Proportional Reinsurance - to help you better understand the language used in insurance policies.

Automatic Proportional Reinsurance

Automatic Proportional Reinsurance

Automatic proportional reinsurance is reinsurance that is based on the primary insurer and the reinsurer splitting the premiums, the expenses, and the losses according to a certain predetermined proportion. In this way, automatic proportional reinsurance serves as a backup risk management option for insurance companies. Insurance companies can purchase this type of insurance if they feel they have assumed too much risk.

We hope the you have a better understanding of the meaning of Automatic Proportional Reinsurance.

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