Phabbyfundz
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Reinsurance is insurance for insurance companies. It is a way of transferring or ceding some of the financial risks insurance company assume in insuring cars, home and businesses to another insurance company, the reinsurer.
Reinsurance, a highly complex global business, accounted for about 9 percent of the U S property or casualty insurance industry premiums in 2008, according to the reinsurance association of America.
The reinsurance business is evolving. Traditionally, reinsurance transactions were between two insurance entities; the primary insurer that sold the original insurance policy and the reinsurer. Most still are the primary insurers and the reinsurer can share both the premiums and losses or reinsurer may assume the primary company's losses above a certain dollar limit in return for a fee. However risks of various kinds particularly if natural disasters are now being sold by insurers and reinsurer to institutional investors in the form of catastrophe bond and other alternative risks spreading mechanisms.
Reinsurance, a highly complex global business, accounted for about 9 percent of the U S property or casualty insurance industry premiums in 2008, according to the reinsurance association of America.
The reinsurance business is evolving. Traditionally, reinsurance transactions were between two insurance entities; the primary insurer that sold the original insurance policy and the reinsurer. Most still are the primary insurers and the reinsurer can share both the premiums and losses or reinsurer may assume the primary company's losses above a certain dollar limit in return for a fee. However risks of various kinds particularly if natural disasters are now being sold by insurers and reinsurer to institutional investors in the form of catastrophe bond and other alternative risks spreading mechanisms.