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Priority in non-proportional reinsurance treaty is the insurer or direct insurance company's retention or deductible after which the reinsurer bears amount of losses that exceeding this deductible i.e All losses within the insurer priority or deductible the reinsurer will not participate it.
The basis for calculation of reinsurer participation is the actual amount of loss , while deposit premium is agreed initially and subject to adjustment at the end of the treaty period.
Unlike retention in the proportional reinsurance treaty where the premium and losses are divided up proportionately between insurer or direct insurance company and the reinsurer.
The basis for calculation of the reinsurer's proportional participation is the sum insured in the original policy / policies.That is to say insurer or direct insurance company retain part of each and every loss and the reinsurer participate in each and every loss and of course , share each and every premium written.
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