can any one say ? what is the different between insurance and re-insurance?
S.Vinothbabu (Articled Assistant) (159 Points)
20 September 2009can any one say ? what is the different between insurance and re-insurance?
Insurance
A system to make large financial losses more affordable by Pooling the risks of many individuals and business entities and transferring them to an insurance company or other large group in return for a premium.
Reinsurance
Insurance bought by insurers. A reinsurer assumes part of the risk and part of the premium originally taken by the insurer, known as the primary company. Reinsurance effectively increases an insurer's capital and therefore its Capacity to sell more coverage. The business is global and some of the largest reinsurers are based abroad. Reinsurers have their own reinsurers, called retrocessionaires. Reinsurers don’t pay policyholder claims. Instead, they reimburse insurers for claims paid.
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