Category: Reinsurance fundamentals · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-05
A cedant is an insurance undertaking that transfers part or all of a risk it has underwritten to another insurer (the reinsurer) under a reinsurance contract, in return for payment of a ceded premium. The cedant is also known as the ceding company, ceding insurer or reinsured.
Category: Reinsurance fundamentals Also known as: ceding company, ceding insurer, reinsured Related concepts: reinsurance, reinsurer, ceded premium Related legislation: Solvency II Directive 2009/138/EC; PRA Insurance Rulebook
The cedant is the party to a reinsurance contract that ‘cedes’ (transfers) the risk. The cedant remains directly liable to the original insured under the underlying contract of insurance — reinsurance does not extinguish the cedant’s primary obligation — but is contractually entitled to recover from the reinsurer in respect of losses falling within the scope of the reinsurance contract [1]. The cedant is sometimes referred to in older market wordings as ‘the reassured’ or ‘the reinsured’.
A primary insurer that purchases reinsurance is a cedant; a reinsurer that itself purchases retrocession is also a cedant in respect of that retrocession contract. The Lloyd’s market terminology refers to the cedant simply as the ‘reinsured’ on slips and treaty wordings, although ‘cedant’ is the standard term in continental and global reinsurance.
The cedant’s status arises from the reinsurance contract itself, which is a contract of indemnity governed in English law by general principles of contract and (where the underlying business is marine, aviation or transit) by the Marine Insurance Act 1906. The cedant owes the reinsurer a duty of fair presentation under the Insurance Act 2015 [2], extending to all material circumstances known or which ought to be known by the senior management and those responsible for the cedant’s reinsurance arrangements.
Under Solvency II, the cedant must satisfy itself that the reinsurer is of adequate financial standing — the Prudential Regulation Authority requires reinsurance recoverables to be valued having regard to the credit quality of the reinsurer counterparty, with a downward adjustment for expected default [3]. The PRA Insurance Rulebook contains specific rules on the recognition and risk mitigation effect of reinsurance for SCR purposes.
The cedant retains the obligation to settle claims under the underlying policy promptly and is not entitled to defer payment to the original insured on the basis that the reinsurer has not yet paid the cedant. The reinsurance is, in legal terms, a separate contract between the cedant and the reinsurer; the insured is generally a stranger to it.
In practice the cedant is responsible for the negotiation, placement and administration of its outwards reinsurance programme. The cedant’s reinsurance team (or its reinsurance broker) prepares the submission, presents the risk to reinsurers, negotiates terms and produces the slip and contract wording.
In treaty reinsurance the cedant cedes premium and losses in accordance with the treaty terms — by proportion under quota share, by surplus over retention under surplus treaty, and by reference to the ultimate net loss under excess of loss contracts. Settlement is typically by quarterly statement (proportional) or by individual claim notification (excess of loss).
The cedant’s accounting and reporting obligations under IFRS 17 and the PRA Insurance Rulebook require it to recognise reinsurance recoverables as separate assets, and to allow for expected reinsurer default through a bad debt provision. The cedant remains responsible for handling the underlying claim and conducting its defence — the reinsurer typically has rights of association and inspection, and certain reinsurance contracts include ‘claims control’ clauses entitling the reinsurer to take over conduct of a claim above an agreed threshold.
For Apex clients, the cedant on most UK insurance policies is the underwriting insurer named on the policy schedule; the reinsurance arrangements behind that insurer are typically not disclosed to the policyholder but materially affect the insurer’s resilience to loss.
An illustrative example: a UK property insurer issues a policy to a commercial landlord with a £25m sum insured. The insurer is the cedant under its property catastrophe excess of loss treaty (which protects it against losses in excess of £10m from any single event) and under its 50 per cent quota share treaty (which cedes half of every risk on the portfolio). Following a £30m loss, the cedant settles the insured £25m, recovers £12.5m under the quota share and £5m under the catastrophe treaty (in excess of its £10m retention, in proportion to its net loss), leaving a net retention of £7.5m.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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