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In reinsurance , what is the rationale behind reinsurance commission paid by reinsurer to the reinsured

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Question added by Mamoun elbaghir abdalla mhamad Eltayeb , Insurance agent / Producer , Albaraka Insurance Company
Date Posted: 2015/03/11
Mamoun elbaghir abdalla mhamad Eltayeb
by Mamoun elbaghir abdalla mhamad Eltayeb , Insurance agent / Producer , Albaraka Insurance Company

 The commission which paid by reinsurers to the reinsured or the ceding company is almost about25% to35% is  due to the fact that the insurance company had spent a lot of money to handle and manage the risk or business , therefor reinsurers pay this commission to contribute with the insurance company in the administration costs that initially paid by the insurance company.

 Thanking you , wit best wishes. 

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