Variance-minimizing quota share split (${\alpha }^{\ast }=1/2$)

For any aggregate with positive finite variance $v$, quota share reinsurance with retained fraction $\alpha$ has total party variance $v({\alpha }^2+(1-\alpha {)}^2)=v/2+2v(\alpha -1/2{)}^2$. Equal sharing uniquely minimizes this objective. The two party totals remain dependent; adding their individual variances is a different objective from the fixed variance of their sum.