återförsäkrare

Återförsäkrare is a Swedish term that translates to "reinsurer" in English. A reinsurer is a company that provides insurance to insurance companies. Essentially, it's insurance for insurance companies.

When an insurance company, known as the primary insurer or cedent, sells policies to individuals or businesses, it takes on the risk of paying out claims. If a large number of claims occur, or if a single claim is exceptionally large, it could financially strain the primary insurer. To mitigate this risk, the primary insurer can purchase reinsurance from a reinsurer.

Reinsurance helps primary insurers manage their capital, protect against catastrophic losses, and stabilize their financial results. It allows them to write more policies than they might otherwise be able to, as the reinsurer shares in the potential losses. There are various types of reinsurance arrangements, including proportional and non-proportional treaties, each offering different levels of risk sharing. The reinsurer collects premiums from the primary insurer for taking on a portion of the risk. This system is crucial for the stability of the global insurance market.