• Reinsurer’s expected deficit (ERD) is a method of reviewing reinsurance contracts to determine the actual transfer of risk. The ERD combines the present value of claims and the frequency of claims into a single measure. It is the probability (or frequency) of the reinsurer’s loss multiplied by the size of the loss itself, calculated for the entire range of loss outcomes. ERD is more reliable than just looking at the 90th percentile result because it takes into account all loss results (including those outside the 90th percentile). While this approach has not replaced the 10/10 rule in practice, it is increasingly being used in assessing risk transfer.