What does Reinsurance mean? Read on to discover the definition & meaning of the term Reinsurance - to help you better understand the language used in insurance policies.
Reinsurance is insurance meant for insurance companies. Reinsurers take on a portion or all of the risks the ceding insurance company, with many dividing their total risks across several reinsurers. The aim of reinsurance is to reduce the risk of the ceding company becoming insolvent or bankrupt by spreading the risks and costs involve in the insurance business.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
c: The sum for which something is insured.
We hope the you have a better understanding of the meaning of Reinsurance. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for: