Glossary

C

Casualty insurance

Insurance primarily concerned with the losses caused by injuries to third persons (in other words, persons other than the policyholder) and the legal liability imposed on the insured resulting therefrom.

Ceding company (also called cedant, or ceding office)

Insurance company, mutual society or provident insurance provider that transfers (or lays off) a part of the risk it has underwritten to a reinsurer.

Cession

Transaction whereby an insurer (cedant or ceding company) either mandatorily or facultatively transfers part of its risk to the reinsurer, as opposed to the concept of acceptance.

Claims/premium ratio

Ratio of claims incurred and evaluated, and of IBNR reserves to earned premiums.

Class of business

A homogeneous category of insurance. Since 1985, French reinsurers have utilised a uniform presentation that distinguishes between life, fire, crop hail, credit and surety, other risks, third party liability, motor, marine and aviation classes. The last eight of these form the general class of Non-Life business. English-speaking markets generally distinguish between Property (damage to goods) and Casualty (liability insurance and industrial injury), and Life business.

Combined ratio

Sum of operating expenses, commissions payable, claims incurred and additional reserves to earned premiums.

Commutation

Operation through which the ceding company takes back the risks ceded to the reinsurer.

Credit and surety insurance

Credit insurance provides cover against loss to a supplier caused by customer insolvency. Surety insurance is a commitment to a bondholder to substitute for his debtor in case of default by the latter.