Reinsurance

This is, in short, the insurance of the risk assumed by an insurer, that is to say, “the insurance of insurance”. It is an agreement whereby one insurance company, called the cedent, transfers to another insurance company, called the reinsurer, all or part of its risks, and the latter receives a portion of the premium.

It is necessary for insurance companies to have similar risks in order to guarantee their stability and, for this reason, they share, or cede, a part of their insured assets with other companies. These mechanisms make the operation of insurance companies more robust and give policyholders peace of mind.