Reinsurance Consulting Services
                     REINSURANCE
WHAT IS REINSURANCE?
• REINSURANCE IS INSURANCE WHICH IS ACQUIRED DIRECTLY OR THROUGH A 
REINSURANCE BROKER BY AN INSURANCE PROVIDER AS A MEANS OF RISK 
CONTROL, OFTEN IN PRACTICE INCLUDING TAX AVOIDANCE AND OTHER 
PURPOSES LISTED BELOW. 
• THE CEDING COMPANY AND THE REINSURER ENTER A REINSURANCE 
ARRANGEMENT THAT SETS OUT THE TERMS UNDER WHICH THE REINSURER 
WILL BE PAYING A PORTION OF THE CEDING COMPANY'S CLAIMS.
WHY REINSURANCE?
• THE KEY REASON TO OPT FOR REINSURANCE IS TO REDUCE THE FINANCIAL 
RISK WHEN CLAIMS ARE MADE TO THE INSURANCE COMPANY'S BALANCE 
SHEET. 
• THIS IS ESPECIALLY IMPORTANT WHEN THE INSURANCE PROVIDER IS 
EXPOSED TO CLAIMS AFTER A NATURAL DISASTER, AS THIS USUALLY 
RESULTS IN A GREATER NUMBER OF CLAIMS COMING TOGETHER.
TYPES OF REINSURANCE
• REINSURANCE BY TREATY - INSURANCE COMPANIES ENTERING A 
REINSURANCE CONTRACT WITH ANOTHER COMPANY PROVIDING INSURANCE 
IS ALSO CALLED AS TREATY INSURANCE. 
• FACULTATIVE - INDIVIDUAL POLICIES ARE CONSIDERED AND A DECISION IS 
TAKEN ON WHAT POLICY NEEDS TO BE PROVIDED WITH REINSURANCE AND 
THE PERCENTAGE OF RISK THAT WILL BE TRANSFERRED ALONG WITH IT. 
BENEFITS OF REINSURANCE
• REINSURANCE COMPANIES OFFER VALUABLE ADVICE
• REINSURANCE HELPS DECREASE RISK
• REINSURANCE CAN STABILIZE FINANCIAL LOSSES.
• REINSURANCE HELPS WITH COMPANY EXPANSION
• IT'S A WORTHWHILE INVESTMENT
THANK YOU