When a ceding insurer transfers a portion of its risk to an assuming insurer on a case-by-case basis, this process is known as what?

The process described in the question, where a ceding insurer transfers a portion of its risk to an assuming insurer on a case-by-case basis, is known as facultative reinsurance. This type of reinsurance allows the ceding insurer to obtain reinsurance for specific policies that it chooses, rather than automatically covering all policies under a blanket agreement.

Facultative reinsurance is particularly useful when the ceding insurer needs to manage specific risks associated with individual policies that may exceed its retention limits or involve unusual or higher-risk exposures. In this scenario, the assuming insurer evaluates the risk and decides whether or not to accept the reinsurance for that specific case.

The other options represent different reinsurance concepts: automatic reinsurance generally refers to treaties that automatically cover a class of risks without individual evaluation; brokerage reinsurance involves a broker acting as an intermediary between the ceding and assuming insurers; and contractual reinsurance is a broader term that can apply to various reinsurance agreements. However, facultative reinsurance specifically highlights the selective nature of risk transfer on a case-by-case basis, making it the correct answer for this question.