Legal Definitions - retrocessionaire

Definition: A retrocessionaire is a reinsurer of a reinsurer in the field of reinsurance. It refers to the process of transferring all or part of a reinsured risk to another reinsurance company, which is also known as reinsurance of reinsurance.

Examples:

• Company A reinsures a risk with Company B. Company B then transfers a portion of that risk to Company C. Company C is the retrocessionaire in this scenario.
• After a natural disaster, an insurance company may have to transfer a large amount of risk to a reinsurer. The reinsurer may then transfer a portion of that risk to a retrocessionaire.

These examples illustrate how a retrocessionaire is involved in the process of reinsurance. It is a way for reinsurers to manage their own risk by transferring some of it to another company. This can help spread the risk and reduce the potential impact of a large loss.