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
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Act of stealing. Coverage can be purchased under most property insurance policies such as the homeowners insurance policy. ...
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Small face amount life insurance policy. ...
Insurance company that specializes in underwriting casualty insurance. ...
Division of a sum of money between a deferred annuity and an immediate life annuity certain. ...
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