Glossary

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Reinsurer: Company that undertakes to cover the portion of a risk ceded to it by the insurer.
Reserve for unexpired risks: Reserves intended to cover the portion of the cost of claims not covered by the unearned premiums reserve, for the period between the accounts closing date and the contract expiration date.
Retention: Share of the risk retained by the insurer or reinsurer for its own account.
Retrocession: Transaction in which the reinsurer transfers (or lays off) all or part of the risks it has assumed to another reinsurer, in return for payment of a premium.
Retrocessionaire: Company that accepts a retroceded risk.
Risk: Property or person insured.
Run off: Halt to all underwriting of new business on a risk portfolio, as a result of which reserves are run off over time until their complete extinction. Run off may take up to several decades depending on the class of business.
Tail: The period of time that elapses between either the writing of the applicable insurance or reinsurance policy or the loss event (or the insurer's or reinsurer's knowledge of the loss event) and the payment in respect thereof. A "short-tail" product is one where ultimate losses are known comparatively quickly; ultimate losses under a "long-tail" product are sometimes not known for many years.