Glossary

Cedent

The insurer that passes part of its risk and premium to a reinsurer, and stays liable to its own policyholders for the whole.

Also called: ceding company, ceding insurer, reinsured, primary insurer in reinsurance

A cedent is the insurance company that buys reinsurance. It "cedes" a share of the premiums and risk on its policies to a reinsurer, which assumes them. The cedent keeps a retention, the part of each loss or portfolio it chooses to carry itself, and pays the reinsurer a premium for the rest. On proportional deals, the reinsurer pays the cedent a ceding commission to help cover its acquisition and underwriting costs.

Say a commercial carrier cedes 30% of a book of contractors' policies under a quota share. It sends 30% of premium to the reinsurer, receives a ceding commission, and recovers 30% of each loss. On non-proportional deals, an excess of loss treaty, the cedent keeps losses up to its retention and the reinsurer pays above it.

Two points matter to policyholders. Reinsurance does not release the cedent from its duty to you: it still owes the claim and collects from the reinsurer afterward. And the cedent's reinsurance program shapes the capacity and pricing it can offer, because a carrier that loses treaty support has to cut limits or raise rates. When a reinsurer in turn passes risk to another reinsurer, the arrangement is retrocession, and the party handing it off is the retrocedent. See treaty reinsurance and the guide on treaty vs facultative reinsurance.

Last reviewed October 10, 2026

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Related terms

Treaty reinsurance A reinsurance contract that automatically covers a defined portfolio of an insurer's policies, instead of reinsuring one risk at a time. Facultative reinsurance Reinsurance negotiated for one specific risk or policy rather than a whole book of business, usually because the risk is large or unusual. Retrocession Reinsurance bought by a reinsurer to pass part of the risk it has assumed to other reinsurers or investors, usually to manage peak catastrophe exposure. Fronting An arrangement where a licensed insurer issues the policy but passes most or all of the risk to a captive or reinsurer, for a fee. Reinsurance Insurance an insurer buys from a reinsurer to transfer part of its risk, add capacity and protect its capital from large or accumulated losses.

Related guides

The Federal Insurance Office and federal reach What Treasury's Federal Insurance Office does and does not do: monitoring, covered agreements, TRIA support, reports, and where federal law touches insurance. Fronting arrangements and fronting carriers: how they work A fronting carrier issues the policy on its paper while a captive or reinsurers carry the risk. Fees, collateral, credit risk and what the policyholder sees. The world's largest reinsurers: 2026 rankings and what they mean AM Best's 2026 ranking of the world's largest reinsurers, with Munich Re first, how to read it, and why the names matter when you buy U.S. commercial coverage. Sidecars, collateralized reinsurance and ILS funds explained How investor-backed reinsurance works: sidecars, collateralized contracts and ILS funds, with 2026 capital figures and what they mean for your coverage. Solvency II, the ICS and global capital rules How the EU's Solvency II, the IAIS Insurance Capital Standard and U.S. risk-based capital differ, and why buyers with global insurers should care. Treaty vs facultative reinsurance: how insurers share risk Treaty reinsurance covers a whole book automatically; facultative covers one risk by negotiation. How each works, a worked split, and what it means for buyers.