jälleenvakuutusta

Jälleenvakuutus, often translated as reinsurance, is a mechanism by which insurance companies transfer a portion of their risks to other insurance companies. This process allows insurers to manage their potential losses and maintain solvency, especially when facing large or catastrophic events. Instead of bearing the entire financial burden of a claim, the primary insurer, known as the ceding company, can share this responsibility with a reinsurer.

There are several forms of jälleenvakuutus. Treaty reinsurance involves the ceding company automatically reinsuring a predetermined portion of a class of risks. Facultative reinsurance, on the other hand, is negotiated on a risk-by-risk basis. Proportional reinsurance, such as quota share or surplus share, involves the reinsurer sharing a specified percentage of both premiums and losses. Non-proportional reinsurance, or excess of loss reinsurance, is designed to protect the ceding company from losses exceeding a certain threshold.

The primary purpose of jälleenvakuutus is risk management. It enables insurers to underwrite larger policies than they could otherwise afford, expands their capacity to absorb new business, and stabilizes their financial results. Furthermore, it can provide regulatory relief, as capital requirements may be reduced when risks are reinsured. For reinsurers, it represents an opportunity to diversify their portfolio and earn profits from underwriting and investment income. The global reinsurance market plays a crucial role in the stability and capacity of the primary insurance sector worldwide.