Reinsurance Strategies

Reinsurance strategies involve insurance companies sharing parts of their risk with other insurers to protect themselves from large claims or losses, much like an umbrella spreads out the rain. This helps them stabilize finances, shoulder large or unpredictable risks, and free up capital for growth. Strategies can include proportional reinsurance, where risk and premiums are shared proportionally, or non-proportional, where reinsurers only pay out if losses exceed a certain amount. By using these strategies, insurers can better manage uncertainty, improve financial stability, and continue offering coverage even during major claims events.