Participation on the part of the reinsurer in a particular individual risk assumed by the direct insurer. This is in contrast to obligatory reinsurance (also: treaty reinsurance).
Price at which a financial instrument would be freely traded between two parties.
Refers to reinsurance transactions which – in addition to the transfer of biometric risks – also include financing components. They generally employ the future profits contained in a block of new or inforce business to enable a ceding company to achieve a desired financial objective. Such reinsurance solutions provide direct insurers with an alternative means of accessing capital in order, for example, to pursue new lines of business or increase capital reserves.