Proportional CoversCore

Bordereaux & OGPI

The paperwork that makes proportional work

The periodic listing of every risk, premium and claim ceded — the record proportional reinsurance runs on.

Open the interactive version → definition, quiz, structure diagram and progress tracking

Definition

A bordereau (plural bordereaux) is a detailed periodic schedule the cedent sends the reinsurer listing every risk, premium or claim falling within a proportional treaty — a premium bordereau lists what was ceded and for how much; a claims bordereau lists what was paid or reserved. Original Gross Premium Income (OGPI), sometimes GNPI, is the subject premium the treaty's rate is applied to, and the figure every adjustment and commission calculation ultimately traces back to.

Bordereaux are how a reinsurer with no direct relationship to the underlying policyholders still knows exactly what it is on risk for — without them, a quota share treaty is a blank cheque.
Late, incomplete or inaccurate bordereaux are one of the most common sources of dispute in proportional reinsurance, because the reinsurer's own reserving and retrocession purchasing depend on data it does not control.
OGPI typically excludes taxes, some fees and sometimes facultative premium, so two treaties with superficially identical wording can define slightly different premium bases — always read the definitions clause, not just the rate.

Worked example

A quota share treaty is rated at 35% of OGPI. The cedent's quarterly bordereau lists $4.2M of qualifying gross premium written; the reinsurer's share of that quarter's premium — and, later, of every claim on those same risks — is 35% of $4.2M.

Scenario · figures in USD

Four quarters, four bordereaux, one running total

A 40% quota share treaty is rated on OGPI. The cedent submits a premium bordereau each quarter; the reinsurer's account is built up entirely from these four submissions.

Q1 bordereau — OGPI	$3.10M
Q2 bordereau — OGPI	$3.45M
Q3 bordereau — OGPI	$2.90M
Q4 bordereau — OGPI	$3.65M
Total OGPI for the year	$13.10M
Reinsurer's premium (40%)	$5.24M
Q3 bordereau arrives 90 days late	Reinsurer's Q3 reserving understated the whole account for a full quarter

So whatThe $5.24M the reinsurer books is only as good as four separate submissions from someone else's systems. The late Q3 bordereau did not change the money owed — it changed how long the reinsurer was flying blind about it.

Check your understanding

What is the primary purpose of a bordereau in proportional reinsurance?

To give the reinsurer the risk-by-risk or claim-by-claim detail it has no direct way of knowing otherwise. The reinsurer has no direct relationship with the underlying policyholders — the bordereau is its only window into what it is actually on risk for.

Two treaties both say "rated on OGPI" but define it slightly differently in their definitions clauses. Why does this matter?

The premium base — and therefore every downstream calculation — can differ even at an identical headline rate. A rate applied to two different bases produces two different answers, however identical the percentage looks on the slip.

Word problem

A 50% quota share treaty is rated on OGPI. Quarterly bordereaux report OGPI of $2.8M, $3.1M, $2.6M and $3.4M. The treaty also carries a 25% ceding commission on ceded premium. Calculate the reinsurer's premium income for the year and the ceding commission it pays back to the cedent.

Show a hint

Total the four bordereaux first, then apply the treaty share, then apply the commission rate to that ceded figure.

Reveal the worked answer

Total OGPI = 2.8 + 3.1 + 2.6 + 3.4 = $11.9M
Ceded premium (reinsurer's share, 50%) = 50% × $11.9M = $5.95M
Ceding commission = 25% × $5.95M = $1.4875M
Reinsurer's premium net of ceding commission = $5.95M − $1.4875M = $4.4625M

The reinsurer books $5.95M of ceded premium built entirely from four bordereaux, pays back $1.4875M in ceding commission, and nets $4.4625M before any claims are paid. Every one of those figures traces back to numbers the cedent, not the reinsurer, produced.