What does Ceded Reinsurance Leverage mean? Read on to discover the definition & meaning of the term Ceded Reinsurance Leverage - to help you better understand the language used in insurance policies.
Ceded Reinsurance Leverage
Ceded reinsurance leverage is a ratio calculated to determine the extent to which an insurance company relies on reinsurance to cover its risks. The formula involves ceded reinsurance premiums, unearned premiums and commissions, policyholders' surplus, and net ceded reinsurance from non-US affiliations for incurred but not reported (INBR), paid, and unpaid losses. The higher the ratio is, the greater the insurance company's dependence on security from its reinsurers.
We hope the you have a better understanding of the meaning of Ceded Reinsurance Leverage.