Reinsurance

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Reinsurance Reinsurance is a type of insurance that insurance companies buy to protect themselves from large losses. When an insurance company sells a policy, it is essentially agreeing to pay out a certain amount of money if the insured event occurs. However, if the insured event is very large, such as a natural disaster, the insurance company could be wiped out financially. Reinsurance helps to protect insurance companies from these large losses by spreading the risk among multiple reinsurers. A transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer. The assumption is in exchange for a premium. Indemnification is on a proportional or non-proportional basis. With non-proportional reinsurance, the reinsurer agrees to pay a certain amount for each claim that exceeds a certain threshold. For example, a ceding company might buy a non-proportional reinsurance policy that will pay out $1 million for any claim that exceeds $100,000. With non-proportional reinsurance, the reinsurer agrees to pay a certain amount for each claim that exceeds a certain threshold. For example, a ceding company might buy a non-proportional reinsurance policy that will pay out $1 million for any claim that exceeds $100,000. Reinsurance is a highly complex global business. However, it is an important part of the insurance market and helps to ensure that insurance companies can provide coverage to their customers. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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