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🔄 '''Property and casualty reinsurance''' is the segment of the [[Definition:Reinsurance | reinsurance]] market devoted to transferring risk from [[Definition:Primary insurer | primary insurers]] that write [[Definition:Property insurance | property]] and [[Definition:Casualty insurance | casualty]] lines of business. Rather than covering individual policyholders, reinsurers in this space assume portions of an insurer's aggregate portfolio or specific large exposures — ranging from homeowners and commercial property to general liability, auto, and workers' compensation. The property and casualty reinsurance market is global in scope, with major hubs in Bermuda, London, Zurich, Singapore, and the United States, and it plays a structural role in ensuring that primary carriers can absorb [[Definition:Catastrophe risk | catastrophe losses]] and maintain adequate [[Definition:Solvency | solvency]] margins.

⚙️ Reinsurers participate through two broad mechanisms: [[Definition:Treaty reinsurance | treaty reinsurance]], which covers an agreed class or book of business automatically, and [[Definition:Facultative reinsurance | facultative reinsurance]], which addresses individual risks on a case-by-case basis. Within these structures, [[Definition:Proportional reinsurance | proportional]] arrangements such as [[Definition:Quota share reinsurance | quota share]] and [[Definition:Surplus share reinsurance | surplus share]] treaties split premiums and losses at a defined ratio, while [[Definition:Non-proportional reinsurance | non-proportional]] arrangements — particularly [[Definition:Excess of loss reinsurance | excess of loss]] covers — respond only after losses breach a specified [[Definition:Retention | retention]]. Pricing in property and casualty reinsurance is heavily influenced by catastrophe modeling, historical [[Definition:Loss experience | loss experience]], and the broader [[Definition:Underwriting cycle | underwriting cycle]]. Regulatory capital frameworks such as the [[Definition:Risk-based capital (RBC) | RBC]] system in the United States, [[Definition:Solvency II | Solvency II]] in Europe, and [[Definition:C-ROSS | C-ROSS]] in China each shape how much credit a [[Definition:Ceding company | ceding company]] can take for reinsurance recoveries, influencing treaty design and [[Definition:Collateral | collateral]] requirements.

🌍 The stability of the global insurance system depends heavily on the availability and pricing of property and casualty reinsurance. After major events like Hurricane Andrew, the Tōhoku earthquake, or the 2017 Atlantic hurricane season, reinsurance capacity tightens and pricing hardens, directly affecting what primary insurers can offer consumers and businesses. The emergence of [[Definition:Insurance-linked securities (ILS) | insurance-linked securities]] and [[Definition:Catastrophe bond | catastrophe bonds]] has broadened the capital base beyond traditional reinsurers, introducing institutional investors into what was once a closed market. For regulators, the soundness of reinsurance arrangements underpins their confidence in an insurer's ability to pay [[Definition:Claim | claims]] — making this segment a focal point of supervisory scrutiny worldwide.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Treaty reinsurance]]
* [[Definition:Excess of loss reinsurance]]
* [[Definition:Catastrophe bond]]
* [[Definition:Retrocession]]
* [[Definition:Ceding company]]
* [[Definition:Underwriting cycle]]
{{Div col end}}

Definition:Property and casualty reinsurance - Revision history

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