Underlying Retention

Filed Under » ,
Dictionary Says

Definition of 'Underlying Retention'

The net amount of risk or liability arising from an insurance policy (or policies) that is retained by a ceding company after reinsuring the balance amount of the risk or liability. The degree of underlying retention will vary depending on the ceding company's assessment of the risks involved in retaining part of the policy liability and the profitability of the insurance policy.
Investopedia Says

Investopedia explains 'Underlying Retention'

Since reinsurance requires the payment of a premium to the reinsurer, underlying retention enables an insurer to avoid payment of this reinsurance premium.  The insurer will generally retain the most profitable policies or their lowest-risk components, while reinsuring less profitable, higher-risk policies.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Ceding Company

    An insurance ...

  2. Reinsurance

    The practice of ...

  3. Cedent

    A party to an ...

  4. Catastrophe Excess Reinsurance

    Insurance for ...

  5. Insurance

    A contract ...

  6. National Average Wage Index - NAWI

    An index ...

  7. 403(b) Plan

    A retirement ...

  8. Financial Intermediary

    An entity that ...

  9. Agent

    1. An individual ...

  10. Guaranteed Investment Contract - GIC

    Insurance ...

Articles Of Interest

  1. How An Insurance Company Determines Your Premiums

    Find out how insurers use credit history to build an insurance score and how it could affect your bottom line.

  2. What is reinsurance?

  3. When Things Go Awry, Insurers Get Reinsured

    Guru Warren Buffett is making this sector popular. Learn more here.

  4. Event-Linked Bonds: Competing Against A Catastrophe

    These debt instruments can blow new wind into your portfolio, but only if you can handle the risk.

  5. Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.

  6. Market Capitalization Defined

    Find out the differences between mega-, large-, mid- and small-cap stocks and how each suits different investing styles.

  7. In Small Business, Success Is Spelled With 5 "C"s

    Incorporating these steps will help your business thrive in a competitive market.

  8. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.

  9. Is Loan Protection Insurance Right For You?

    This coverage can keep you from defaulting on your loans when you're in financial trouble.

  10. Selecting And Managing Insurance Payouts

    Find out which settlement option is right for you before you recieve your funds.
Sponsored links

comments powered by Disqus
Hot Definitions

  1. Love Money

  2. Shark Watcher

  3. Judo Business Strategy

  4. Dogs Of The Dow

  5. Chinese Hedge

  6. X-Mark Signature

Recommended
Loading, please wait...
See More »
Trading Center