Insurance and Reinsurance - Cost of Revenue?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by tom_tom, 17th Aug, 2018.

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  1. tom_tom

    tom_tom Member

    Joined:
    23rd Mar, 2016
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    Melbourne
    I'm trying to work out a fair cost of revenue for an insurance company.
    In it I'm including commission and fees though I am also pondering the below.

    If a sale of an insurance contract is made then all the inputs into selling that contract should be included.

    However... I see an entry, 'Insurance Premiums Ceded to Reinsurers' . If I make a sale of insurance then give it to a re-insurer, then wouldn't the 'Insurance Premiums Ceded to Reinsurers'
    be classed as a cost of revenue? You made the sale, but you can't or won't cover it, so you pass it onto another insurer.

    Would anyone know?
     
    tom_tom, 17th Aug, 2018
    #1
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