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Insurance covers the direct exposure to the insured. Re-insurance covers insurance companies against the aggregated loss.
Earthquake insurance is a good example. You might have EQ insurance on your home or commercial building. If you have a loss your insurance pays your claim.
That insurance company that insures you might have re-insurance with a bigger insurer if total claims exceed a very large number. Lloyd's of London and Swiss Re are big re-insurers.
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Who are the buyers of reinsurance?
*Direct insurance company *Captive insurance company *Reinsurer However, there are no clear separation between buyers and sellers in reinsurance. Insurance company maybe a buyer (outward reinsurance) and a seller (inward reinsurance)
Distinguish between co-insurance and reinsurance?
Coinsurance in medical health (casualty) is sharing of costs between insurer and insured, and in property insurance it is were the risk( one risk) is shared between different insurance companies. Reinsurance is insurance for an insurance company, where by an insurance companies seeks for indemnification in case that a stated loss takes place.
What is called reinsurance?
When we go for insurance , the insurance have a time period for which it will be valid. When we want to extend the time period of the insurance,we have to do reinsurance.
The oldest and continuously active insurance and reinsurance market is called?
(LIRMA) London Insurance & Reinsurance Market Association
What has the author Robert L Carter written?
Robert L. Carter has written: 'The London insurance market' -- subject(s): Insurance, Insurance exchanges, Market surveys 'Reinsurance' -- subject(s): Reinsurance 'The reinsurance market'
Who is Insured in case of Reinsurance?
Reinsurance may be purchased by an insurance company for an individual risk, a specific class of risk, or an entire book of business. In any case, the insurance company that purchases the reinsurance is the Insured. The actual policy holder(s) are unaware of the reinsurance arrangement.
What are the reasons for reinsurance?
There are several reasons for reinsurance. Firstly, reinsurance helps insurance companies manage their risk exposure by transferring a portion of their risk to reinsurers. Secondly, it provides financial stability to insurance companies in the event of large or catastrophic claims. Lastly, reinsurance allows insurance companies to underwrite policies with higher limits, which they may not be able to handle on their own.
Difference between risk sharing and risk transfer in insurance in insurance?
Risk Sharing is used in coinsurance specifically where the risk is to be shared and not transferred among several insurance companies each one them having a direct contractual relationship with the insured for the portion of the risk accepted by that company.and transferring the risk is used in reinsurance , and reinsurance always involves legal entities and not individualsin reinsurance the contractual relationship is between the cedant and the reinsurer , only in special situations does the reinsurance treaty have a provision called the cut through clause that allows the insured to have a direct legal claim to the reinsurer for example , in the case the insurer becomes insolventHope all is in orderRegards,Tamer Hadddin
How is reinsurance different from insurance?
Insurance is simply when one is able to receive money for damages. Reinsurance is the same except it covers the actual insurance companies themselves. This is a form of risk management.
What are the reasons for government intervention in reinsurance?
The government regulates reinsurance for the same reasons it regulates most insurance: to protect consumers. Government itself can become a reinsurer where the potential for large losses (while unlikely) is too great for an insurer to reasonably risk. The reinsurance by a government entity does not spread local risks throughout the insurance markets, as does private reinsurance. A good example is the US Flood Insurance offered in many areas. This fills the gap between private insurance and the actual risk faced from catastrophic flooding.
What is reinsurance broker?
No such profession. There are only insurance brokers. These will handle renewal of insurance.
What is meant by quota share treaty reinsurance?
Quota Share reinsurance is a type of pro rata reinsurance in which the primary insurer and the reinsurer share the amounts of insurance, policy premiums and losses (including loss adjustment expenses) using a fixed percentage. Quota Share reinsurance can be used for both property and liability insurance but is more frequently used in property insurance.
