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Insurance vocabulary · Reinsurance

Quota share

Meaning in insurance, with examples

nounAdvanced term

In insurance, quota share means: A proportional reinsurance arrangement in which the insurer and reinsurer share the premiums and claims of every policy in a fixed percentage.

In Turkish: kotpar, kota paylı reasürans

How it is used

Simple and common, especially for new companies or new lines. In a 40 percent quota share, the reinsurer takes 40 percent of each premium, pays 40 percent of each claim and usually pays a ceding commission. Often written 'QS'.

Example sentences

  1. The new health portfolio is protected by a 50 percent quota share.

  2. Under the quota share, the reinsurer pays a 30 percent ceding commission.

Common collocations

  • quota share treaty
  • 50 percent quota share
  • quota share reinsurance
  • cede under the quota share
  • treaty reinsuranceA reinsurance agreement that automatically covers a whole group of an insurer's policies, such as all its property business, for a set period.
  • excess of lossA type of reinsurance in which the reinsurer pays the part of a loss above an agreed amount, up to an upper limit.
  • ceding companyAn insurance company that passes, or cedes, part of its risks to a reinsurer. It is also called the cedant.
  • commissionA payment, usually a percentage of the premium, that an insurance company pays to an agent or broker for selling a policy.

More terms: Reinsurance

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This page explains English vocabulary for learners. It is not financial advice.