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What is Reinsurance ?

Reinsurance is a financial transaction by which risk is transferred from an insurance company to a reinsurance company in exchange of a payment.

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What is Reinsurance ?

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  1. Reinsurance

  2. WHAT IS REINSURANCE? • Reinsurance is insurance which is acquired directly or through a Reinsurance broker by an insurance provider as a means of risk control, often in practice including tax avoidance and other purposes listed below. • The ceding company and the reinsurer enter a reinsurance arrangement that sets out the terms under which the reinsurer will be paying a portion of the ceding company's claims.

  3. Why REINSURANCE? • The key reason to opt for reinsurance is to reduce the financial risk when claims are made to the insurance company's balance sheet. • This is especially important when the insurance provider is exposed to claims after a natural disaster, as this usually results in a greater number of claims coming together.

  4. TYPES OF REINSURANCE • Reinsurance By Treaty - Insurance companies entering a reinsurance contract with another company providing insurance is also called as treaty insurance.  • Facultative - individual policies are considered and a decision is taken on what policy needs to be provided with reinsurance and the percentage of risk that will be transferred along with it. 

  5. Benefits of Reinsurance • Reinsurance companies offer valuable advice • Reinsurance helps decrease risk • Reinsurance can stabilize financial losses. • Reinsurance helps with company expansion • It's a worthwhile investment

  6. Thank you

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