I recently received an email from a reader asking a couple of questions :
"I'm trying to understand Net vs Gross Quota shares in reinsurance. Is a 'Net Quota Share' always defining a treaty where the reinsurer will pay ceding commissions on the Net Written Premium? ... Are there some Net Quota Shares where the reinsurer caps certain risks (e.g. catastrophe)?"
It's a reasonable question, and the answer is a little context dependent, full explanation given below.
Source: https://unsplash.com/@laurachouette, London
(As an aside, in the last couple of weeks, the UK has lurched from what was a rather pleasant summer into a fairly chilly autumn, to mirror this, here's a photo of London looking a little on the grey side.)
I work as an actuary and underwriter at a global reinsurer in London.