What is a reinsurance arrangement?

Reinsurance Agreement — agreement by which one insurance company transfers risk to another (buys reinsurance). Unlike an insurance policy, both parties sign a reinsurance agreement.

What does a reinsurer do?

A reinsurer is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.

What is the disadvantage of reinsurance?

The main disadvantage for insurance companies is that buying reinsurance is costly. The answer for insurance companies is usually yes. They don’t want to take a chance and have the entire company go under if there is a damaging weather event that results in too many claims to pay.

How does a reinsurer make money?

Reinsurance companies make money by reinsuring policies that they think are less speculative than expected. Below is a great example of how a reinsurance company makes money: “For example, an insurance company may require a yearly insurance premium payment of $1,000 to insure an individual.

Who owns Kenya Re?

How many shares does Kenya Re have and who are the main shareholders? The numbers of shares are 600,000,000. The Kenya Government has the majority shareholding of 360, 000,000 (60%) while the remainder (40%) 240,000,000 is held by the public.

What is reinsurance?

Definition, Types, Importance, Examples Reinsurance is insurance of insurance, where one or more insurance companies agree to indemnify the risk, partially or altogether, for the policy issued by another one or more insurance companies.

Why do insurance companies take the support of reinsurers?

It is to avoid such risks that insurance companies take out policies. Secondly, insurance companies take the support of reinsurers when they do not have the capacity to provide a cover on their own. Broadly, reinsurance can be classified under two heads – treaty reinsurance and facultative reinsurance.

What is reinsurance and how does it affect Ceding companies?

By affecting the reinsurance contracts, the ceding company cannot recover from each reinsurer’s full amount of loss independently. The main reason for the practice of reinsurance that it enables a risk to be scattered over a much wider area and the principle of insurance is taken well care of.

What is reinsurer or reassurer?

Definition of Reinsurer or Reassurer Meaning the person, body, or company giving reinsurance cover. They protect the insurer’s interest in case of loss/damage of the property or subject matter insured and for which the insurer is liable under the policy of insurance.