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Insurance vocabulary · Reinsurance

Retention

Meaning in insurance, with examples

/rɪˈtenʃən/nounAdvanced term

In insurance, retention means: The part of a risk or loss that an insurer keeps for its own account instead of passing it to reinsurers.

In Turkish: saklama payı, kendi üzerinde kalan pay

How it is used

A key decision when buying reinsurance: a higher retention means paying less reinsurance premium but carrying more risk. In excess of loss treaties it works like a deductible. In sales, the same word means keeping customers ('customer retention').

Example sentences

  1. We increased our retention to 50 million lira to reduce reinsurance costs.

  2. Any loss above the retention is paid by the reinsurers.

Common collocations

  • net retention
  • increase the retention
  • retention level
  • retention limit
  • reinsuranceInsurance bought by insurance companies to pass part of their risks to another company, so that very large or numerous losses do not threaten them.
  • ceding companyAn insurance company that passes, or cedes, part of its risks to a reinsurer. It is also called the cedant.
  • 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.
  • deductibleThe part of each loss that the customer pays before the insurance company starts paying. A higher one usually means a lower premium.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Reinsurance

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