Introduction to Reinsurance
We have already discussed How Insurance Companies Make Profit? But what if there is a situation where an insurance company fails to make profits or a natural disaster results in a large-scale loss that insurance company runs the risk of bankruptcy? That is where the concept of Reinsurance comes in.
Reinsurance simply means insurance for insurance companies. It is an agreement between the insurance and Reinsurance company that indemnifies the contract between both parties. It is used as cushion money against any sort of emergency, be it natural disaster resulting in a financial loss […]