Treaty reinsurance
Treaty reinsurance is an arrangement in which a reinsurer agrees to cover a defined class or portfolio of an insurer's policies under a single contract, rather than reviewing each risk one at a time.
Under a treaty, the ceding insurer and the reinsurer agree in advance on the terms that apply to an entire book of business, such as all commercial property policies or all cyber policies written during the treaty period. Once the treaty is in force, individual risks that fall within its scope are reinsured automatically, so the primary insurer does not have to negotiate coverage policy by policy.
Treaty reinsurance gives insurers predictable, ongoing protection and frees underwriters to write new business without seeking approval for each risk. It also helps carriers manage capital, smooth results across years, and limit exposure to large or accumulating losses. Treaties are generally structured as either proportional, such as quota share, or non-proportional, such as excess of loss.
For example, a carrier might buy a treaty that reinsures its entire homeowners portfolio for a one-year term, with the reinsurer sharing premiums and losses according to agreed terms. As an AI-native reinsurer, RiskCube Re can structure treaty capacity for MGAs and carriers building portfolios in emerging and complex risk classes.
Definitions are educational and general, and specific contracts, endorsements, and state rules may modify them. For regulatory guidance, refer to the NAIC or the Insurance Information Institute.