What is Reinsurance? | Mint Masterclass

Did you know that the most expensive insurance claims of all time were collectively £15.4 trillion, made during the financial collapse of 2008? This amount is more than the GDP of the entirety of the United States! And thus one can imagine how herculean a task it must have been for the insurance company to pay out this amount!

Ever wondered if insurance firms have any sort of insurance for times like these? Well, this is where the concept of Re-insurance comes into picture. Simply put, reinsurance is also known as insurance for insurers or stop-loss insurance.

Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement. It reduces the likelihood of paying a large obligation resulting from an insurance claim.

Reinsurance is an extremely important term when it comes to the insurance business!

In this video, let us try and understand this is detail and answer the key questions:
1. What exactly is Reinsurance and How it works?
2. Why is reinsurance necessary?
3. What are the types of reinsurance?

#reinsurance #finance #mint

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