An amount paid by a reinsurer to the ceding company to cover the ceding company's acquisition and other expenses. Usually a ceding commission also provides profit to the ceding company and is called a ceding allowance. See Expense Allowance.

The commission paid by the reinsurer to the ceding company (primary insurer) on reinsurance agreements as compensation to place the business with the reinsurer and to cover the ceding company's acquisition expenses.

The cedant's acquisition costs and overhead expenses, taxes, licenses and fees, plus a fee representing a share of expected profits, which often is expressed as a percentage of the gross reinsurance premium.