Outgoing premiums less return premiums arising from reinsurance purchased from other insurance entities are called:

Question

Options

• ARating premkts
• BDirect premiums
• CAssumed reinsurance premiums
• DCeded reinsurance premiums

• A
  7% (3)
• B
  14% (6)
• C
  5% (2)
• D
  75% (33)

Explanation

Ceded reinsurance premiums (D) refers specifically to premiums an insurer pays out to another insurer (the reinsurer) to transfer risk, net of any return premiums - making "ceded" the precise term for this outgoing flow. Rating premkts (A) is not a standard insurance term and appears to be a distractor/typo. Direct premiums (B) are premiums collected directly from policyholders, representing the insurer's own business - the opposite direction of flow. Assumed reinsurance premiums (C) are premiums an insurer receives when it acts as the reinsurer accepting risk from another company, which is the reverse transaction.

Memory tip: Think of "cede" as meaning to give up or transfer - when you cede reinsurance, you're giving away risk (and paying premiums out); when you assume reinsurance, you're taking risk in (and receiving premiums). Outgoing = ceded, incoming = assumed.

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