jälleenvakuutuksella

Reinsurance, known as jälleenvakuutus in Finnish, is a practice where one insurance company, the cedent, transfers a portion of its risks to another insurance company, the reinsurer. This allows the cedent to reduce its exposure to large losses, increase its capacity to underwrite more policies, and stabilize its financial results. Reinsurance is a critical component of the global insurance market, enabling insurers to manage their capital more effectively and to offer coverage for a wider range of risks.

There are several types of reinsurance, including facultative reinsurance and treaty reinsurance. Facultative reinsurance is negotiated on a policy-by-policy basis, providing coverage for specific, often large or unusual risks. Treaty reinsurance, on the other hand, covers a defined portfolio of risks over a specified period, automatically reinsuring all policies that fall within the treaty's terms. Reinsurance agreements can be structured in various ways, such as proportional reinsurance, where the reinsurer shares a predetermined percentage of premiums and losses, or non-proportional reinsurance, where the reinsurer covers losses only above a certain threshold.

The primary motivations for seeking reinsurance include spreading risk, protecting against catastrophic events, managing capital, and gaining access to specialized underwriting expertise. For reinsurers, the business involves assuming risks and earning premiums, often benefiting from diversification across different cedents and geographical regions. Reinsurance plays a vital role in the solvency and stability of the primary insurance industry, ultimately benefiting policyholders by ensuring that insurers can meet their obligations even in the face of significant claims.