Simple Profit Commission

Example
A property pro-rata contract has the following
profit commission terms
50% Profit Commission after a reinsurers
margin of 10%.
Key Point: Reinsurer returns 50% of the
contractually defined profit to the cedant
Profit Commission Paid to Cedant =
50% x (Premium - Loss - Commission Reinsurers Margin)
If profit is negative, reinsurers do not get any
additional money from the cedant.