Cedant
An insurer or reinsurer that purchases reinsurance or ILS protection, 'ceding' risk to another party.
A cedant is the party that transfers (cedes) risk to a reinsurer or ILS structure. In traditional reinsurance, the cedant is typically a primary insurer or reinsurer that purchases protection on a portion of its portfolio. In the ILS market, cedants include insurers, reinsurers, government catastrophe schemes, and occasionally corporates with large catastrophe exposures.
The cedant retains a portion of each risk (the retention) and cedes the rest to the reinsurance market. The size of the cession and the attachment point of the protection determine the cedant's net exposure after reinsurance.
Cedant relationships are central to reinsurance — major reinsurers develop long-term relationships with cedants, providing continuity of capacity and pricing through soft and hard markets. ILS capital is generally more transactional.
Example usage
“The cedant ceded 40% of its Florida residential book to a panel of traditional reinsurers, retaining the first $100m of loss.”
Frequently asked questions
What is Cedant?
An insurer or reinsurer that purchases reinsurance or ILS protection, 'ceding' risk to another party. A cedant is the party that transfers (cedes) risk to a reinsurer or ILS structure. In traditional reinsurance, the cedant is typically a primary insurer or reinsurer that purchases protection on a portion of its portfolio. In the ILS market, cedants include insurers, reinsurers, government catastrophe schemes, and occasionally corporates with large catastrophe exposures.
How is Cedant used in practice?
The cedant ceded 40% of its Florida residential book to a panel of traditional reinsurers, retaining the first $100m of loss.
More Reinsurance terms