This depends upon the negotiations between the insurance company and the reinsurance company. Even though it might seem like the reinsurance company should take as little risk as possible, this would mean that the reinsurance company would get as little of the associated premiums as possible.

If the reinsurance company has determined that the business is (or should be) profitable, then it would be in the reinsurance company’s best interest to “assume” as much risk and associated premiums as possible (or “Ceding Fee”).