Loss Portfolio

The amount of the outstanding losses at a particular date.

Occasionally a treaty might provide for the loss portfolio to be withdrawn at termination of the treaty. In such event the reinsurer will pay the reinsured a negotiated percentage (generally in the range from 90% to 110%) of the outstanding losses to the treaty at the termination date in return for a release from any and all future liability. Treaties can also be structured to require the reinsured to assume a loss portfolio.

The reinsurer will be credited with the loss portfolio from the previous year and will thus assume liability for all losses paid in the current year but which may have occurred in previous years.