Reinsurance
Definition of "Reinsurance"
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).
Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a class or line of business, or a geographical area, within a relatively short time period; and share large risks with other companies.
Popular Insurance Terms
coverage for contingent liability exposure. ...
Written contract between an insured and an insurance company stating the obligations and responsibilities of each party. ...
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Fund that concentrates primarily on short-term government securities, certificates of deposit with maturities less than one year, and high-quality interest-bearing corporate debt. The fund ...
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Figure in a mortality table derived by dividing the number of people alive at the end of a given year by the number of people alive at the beginning of that same year. ...
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