✅ What is a quota share treaty? | Reinsurance tutorials #5 • The Basics

Understand what is a quota share treaty - easily explained with a video. 📌These tutorials will offer you all the basics you need to master reinsurance
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[@MdZeeshan-IBMIN]

Amazing explanation

[@MohsinKhan-qp8xw]

You said, quota share can be used on its own, do please elaborate if we are using it for our own then why we are naming it "Quota Share"?

[@ccrre8642]

Hello Mohsin,
When saying can be used on its own i guess.
I was meaning that this can be the only reinsurance treaty you may have without using any other own.
For instance you write 100 Mios $ premium on Motor risks but you find it to heavy in case of claims deviation compared to yr surplus funds , and to the other lines of business where yr income is much below.
So you will reduce the impact of this loss deviation, and/or the capital requirements attached to the risks you take, by setting up a quota share whereby you cede say 40% of the premium but also 40% of the risks (reducing thus yr capital requirements) and 40% of the claims reducing thus the impact on yr global book of business.
Hope this clarifies
Patrick