What is the Definition of Reinsurance?

What is the Definition of Reinsurance?

Insurance bought by insurers. A reinsurer assumes part of the risk and part of the premium originally taken by the insurer, known as the primary company. Reinsurance effectively increases an insurer’s capital and therefore its capacity to sell more coverage. The business is global and some of the largest reinsurers are based abroad. Reinsurers have their own reinsurers, called retrocessionaires. Reinsurers don’t pay policyholder claims. Instead, they reimburse insurers for claims paid. (See Treaty reinsurance; Facultative reinsurance)

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Reinsurance?

You can find random definition and meaning of insurance terms below:

What is the meaning of Actual cash value (ACV)

The value of any property that is lost or damaged at the time of the loss, in contrast to Replacement Cost (RC). See depreciation.

What is the meaning of Additional coverage for sound, picture and data devices (auto)

Coverage for electronic equipment that receives or transmits audio, visual or data signals and is not designed solely for the reproduction of sound, as well as any accessories used with such equipment. These devices do not need to be permanently installed in the vehicle, but are attached to a component of the vehicle.

What is the meaning of Additional insured

Any person or party besides the policyholder who is added to a policy, so that they will also be covered by that policy.

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