RI (reinsurance)

Reinsurance (RI) is a process where an insurance company transfers part of its risk to another company, called a reinsurer. This helps the primary insurer reduce potential losses from large claims or a high volume of claims. By sharing risk, the insurer can offer coverage more securely, protect its financial stability, and take on larger or more complex policies. Reinsurance acts like an insurance policy for insurance companies, ensuring they remain financially healthy and capable of handling unexpected claims.