A quota share reinsurance treaty involves a cedant transferring a fixed percentage of every policy or risk in a defined portfolio to a reinsurer, sharing premiums, losses, and often acquisition costs in that same proportion. This structure provides straightforward capital relief, earnings stabilisation, and support for growth in new or volatile lines. For underwriting and finance teams, quota share design and negotiation—ceding commission levels, profit‑sharing, and exclusions—are crucial levers in managing combined ratios and return on capital.
