Rückversicherungsvertrag

Rückversicherung is the German term for reinsurance. It is a mechanism by which insurance companies transfer a portion of their risks to another insurance company, known as a reinsurer. This process allows primary insurers to reduce their exposure to large losses, stabilize their underwriting results, and increase their capacity to underwrite more business.

The concept of reinsurance is similar to insurance for insurance companies. When a primary insurer writes a policy, it collects premiums and agrees to cover potential claims. However, if a catastrophic event occurs, such as a major natural disaster, the claims could exceed the primary insurer's financial capacity. By purchasing reinsurance, the primary insurer shares this risk with the reinsurer. In return for a premium paid by the primary insurer, the reinsurer agrees to cover a portion of the claims that exceed a certain threshold.

There are several types of reinsurance arrangements, including facultative reinsurance, where individual risks are reinsured, and treaty reinsurance, where a block of business or a portfolio of risks is reinsured under a pre-agreed contract. Reinsurance plays a vital role in the global insurance market, enabling insurers to manage risk effectively and ensuring that they can meet their obligations to policyholders, even in the face of significant losses. It contributes to the stability and solvency of the insurance industry as a whole.