A ceding company is an insurance company that passes a portion or all of the risk associated with an insurance policy to another insurer. Ceding is helpful to insurance companies since the ceding company that passes the risk can hedge against undesired exposure to losses.

Who is ceding insurer?

Definition: Ceding company is an insurance company that transfers the insurance portfolio to a reinsurer. The insurer however is liable to pay the claims in the event of default by the reinsurer.

What does ceding Party mean?

Definition. In the reinsurance industry, the ceding party is the insurance company spreading insurance obligations to the reinsurer in order to lower risk.