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Insurance vocabulary · Reinsurance

Reinsurance

Meaning in insurance, with examples

/ˌriːɪnˈʃʊrəns/nounCore term

In insurance, reinsurance means: Insurance bought by insurance companies to pass part of their risks to another company, so that very large or numerous losses do not threaten them.

In Turkish: reasürans

How it is used

Often explained as 'insurance for insurers'. Insurers buy or place reinsurance, usually through reinsurance brokers, and renew most programmes on fixed dates such as 1 January. Key words: treaty, facultative, retention, cede.

Example sentences

  1. Without reinsurance, a single major earthquake could wipe out a local insurer's capital.

  2. Reinsurance prices went up at the January renewals after a year of heavy catastrophe losses.

Common collocations

  • buy reinsurance
  • reinsurance programme
  • reinsurance broker
  • reinsurance cover
  • reinsurance renewal
  • reinsurerA company that insures insurance companies, accepting part of their risks in return for part of the premium.
  • ceding companyAn insurance company that passes, or cedes, part of its risks to a reinsurer. It is also called the cedant.
  • treaty reinsuranceA reinsurance agreement that automatically covers a whole group of an insurer's policies, such as all its property business, for a set period.
  • facultative reinsuranceReinsurance arranged separately for one specific risk, such as a large factory, where the reinsurer can accept or decline each case.
  • retentionThe part of a risk or loss that an insurer keeps for its own account instead of passing it to reinsurers.

More terms: Reinsurance

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This page explains English vocabulary for learners. It is not financial advice.