Reinsurance is insurance purchased by the insurance company to help manage their exposure to risk that results from the policies that they issue. On the surface, it seems like a very straightforward industry, but due to a series of legislative and regulatory changes, the Reinsurance industry in general, and one of its larger companies (AIG) in particular found itself at the center of the recently passed financial crisis.
The two most common forms of Reinsurance are Treaty Reinsurance and Faculative Reinsurance.
With Treaty Reinsurance the insurer and the reinsurer formulate and execute a Reinsurance Contract, at which point the reinsurer covers all policies that fall under the scope of that contract in their entirety. Under a Faculative Reinsurance arrangement, the insurer cedes a portion of the risk on covered contracts to the reinsurer through a specified insurance policy. This requires each contract covered to be negotiated separately, so is far more time consuming than a Treaty Reinsurance agreement.
Because of the risk transfer inherent in the Reinsurance Industry, it allows for insurance companies to write policies for much higher limits than they would otherwise be able, which allows them to take on more risk (and concurrently make more money in the process).
With the rapid changes in both regulatory requirements, oversight and public opinion on the Reinsurance market, reliable information is a necessity. MarketResearch.com offers the finest collection of market reports on the Reinsurance Industry available. With information on marketing strategy, segmentation, regulatory concerns, growth projections, sales, and size for both the US and Global Markets, these reports are essential for formulating business strategy today.