What is reinsurance ?

1 Answer

Answer :

When an insurer insures its insured content with another insurer, it is called reinsurance. In this case, the first insurer is considered as the insured and the second insured is considered as the reinsurer. Suppose usually ; When an insurer, after insuring a subject, thinks that it is not possible for him to bear all the risks alone ; In that case , the insured himself insures his insured content with another insurance company to reduce the risk. For example, suppose that an insurer insures its insured content to another insurance company called B, thinking that it is not possible for him to bear the risk on his own. This is called reinsurance. Company A is the insurer here and Company B is the reinsurer here. It is important to mention here that the reinsurer has nothing to do with the original insured. Reinsurance will be governed by the terms of the agreement between the original insured and the original insurer. If the first contract is canceled for any reason, the reinsurance contract will also be considered canceled.

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