What is cession in SAP FS-RI - Reinsurance?

SAP Term: cession

• Component: FS-RI

• Component Name: Reinsurance

• Description: A category that is used to distinguish between different types of risk transfer. Reinsured risks with this category are transferred to the aggregated liability of reinsured risks with the category "Assumed" by one or more owner companies. This liability is distributed to retention and to obligatory and facultative reinsurance.

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• Key Concepts: 
  Cession is a term used in the FS-RI Reinsurance component of SAP. It is a process of transferring risk from one insurer to another. This process is also known as reinsurance. The ceding insurer transfers part or all of its risk to the reinsurer, who then assumes responsibility for the risk and pays out any claims that may arise. 
  
  How to use it: 
  In SAP, cession is used to manage the transfer of risk from one insurer to another. The ceding insurer can set up a cession contract in SAP, which will define the terms and conditions of the transfer. The reinsurer will then accept or reject the cession contract. Once accepted, the reinsurer will assume responsibility for the risk and pay out any claims that may arise. 
  
  Tips & Tricks: 
  When setting up a cession contract in SAP, it is important to ensure that all relevant information is included. This includes details such as the type of risk being transferred, the amount of coverage, and any exclusions or limitations. It is also important to ensure that all parties involved are aware of their responsibilities and obligations under the contract. 
  
  Related Information: 
  For more information on cession in SAP, please refer to the official SAP documentation on FS-RI Reinsurance. Additionally, there are many online resources available which provide further information on cession and reinsurance in general.