Category: Reinsurance fundamentals · Reviewed by Jake Leat, Associate Director · Last reviewed 2026-06-05
The risk attaching basis (RAD — risks attaching during) is a reinsurance attachment basis under which the reinsurance treaty responds to losses arising from underlying insurance policies that incept during the treaty period, regardless of when the loss itself occurs or is notified.
Category: Reinsurance fundamentals Also known as: risks attaching during, RAD, policies attaching basis Related concepts: loss occurring basis, underwriting year, reinsurance treaty
Under a risk attaching basis, the trigger for the reinsurance is the inception date of the underlying policy. A 2024 risk attaching XL treaty will respond to any loss arising from a policy incepting between 1 January and 31 December 2024 — even where the loss itself occurs in 2025 or later. The treaty effectively follows the underwriting year of the cedant’s portfolio.
The risk attaching basis is the natural basis for proportional reinsurance (where the reinsurer assumes a proportion of every risk written during the treaty year) and for excess of loss reinsurance covering long-tail business where losses may emerge years after policy inception.
The choice between risk attaching and loss occurring is a contractual matter set out in the slip and treaty wording. The Market Reform Contract template provides the standard format for stating the attachment basis. The Insurance Act 2015 duty of fair presentation [1] applies equally to risk attaching and loss occurring contracts.
In practice the risk attaching basis is used principally for proportional reinsurance (quota share and surplus treaties) and for excess of loss reinsurance on long-tail casualty business. The basis means that the treaty receives premium and accepts losses by reference to the underwriting year of the cedant — a ‘closed’ year of account can be projected to ultimate result using only the policies incepting in that year.
The risk attaching basis is convenient for the cedant because it aligns with underwriting year accounting and matches premiums and losses arising from the same book of business. It is less convenient for the reinsurer because the run-off of losses can extend many years beyond the treaty period.
An illustrative example: a UK professional indemnity insurer’s 2024 surplus treaty is written on a risk attaching basis. A policy incepting 1 December 2024 attracts cession to the 2024 treaty. A claim notified under that policy in March 2026 (16 months after policy inception) is recoverable under the 2024 treaty. The corresponding 2026 treaty has no involvement because the underlying policy was a 2024 risk.
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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