agreement in which one insurer indemnifies another insurer for all or part of the risk of a policy originally issued and assumed by that other insurer.
sharing of risk among insurance companies. Part of the insurer's risk is assumed by other companies in return for a part of the premium fee paid by the insured. Reinsurance allows an individual company to take on clients whose coverage would be too great a burden for one insurer to carry alone.
sharing of risk among insurance companies. Part of the insurer's risk is assumed by other companies in return for a part of the premium fee paid by the insured. By spreading the risk, reinsurance allows an individual company to take on clients whose coverage would be too great a burden for one insurer to carry alone.
form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk ( facultative reinsurance) or a large number of risks ( automatic reinsurance) by giving (ceding) a portion of its liability to another insurance company (the reinsurer).
There are two broad forms of reinsurance: proportional reinsurance and nonproportional reinsurance.
