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🏗️ '''Reinsurance company''' is an insurer that provides [[Definition:Reinsurance | reinsurance]] — essentially insurance for [[Definition:Insurance carrier | insurance companies]] — by assuming a portion of the risk originally written by primary insurers or [[Definition:Cedent | cedents]]. These companies occupy a critical structural position in the global insurance ecosystem, absorbing large or catastrophic [[Definition:Loss | losses]] that would be too concentrated or volatile for any single primary insurer to bear alone. The world's major reinsurance companies — including firms such as [[Definition:Munich Re | Munich Re]], [[Definition:Swiss Re | Swiss Re]], [[Definition:Hannover Re | Hannover Re]], and [[Definition:SCOR | SCOR]] — are headquartered primarily in Europe and Bermuda, though significant reinsurance capacity also exists in the United States, Asia, and the [[Definition:Lloyd's of London | Lloyd's]] market.

🔄 A reinsurance company operates by entering into [[Definition:Reinsurance treaty | treaty]] or [[Definition:Facultative reinsurance | facultative]] contracts with primary insurers, agreeing to indemnify them against specified losses in exchange for a share of the [[Definition:Premium | premium]]. Under [[Definition:Treaty reinsurance | treaty reinsurance]], the reinsurer covers an entire portfolio or class of business on a [[Definition:Proportional reinsurance | proportional]] or [[Definition:Non-proportional reinsurance | non-proportional]] (excess of loss) basis, while [[Definition:Facultative reinsurance | facultative]] arrangements are negotiated risk by risk. Reinsurance companies must maintain substantial [[Definition:Capital adequacy | capital reserves]] and are subject to dedicated regulatory frameworks: in Bermuda, the Bermuda Monetary Authority classifies reinsurers by tier; in the EU, [[Definition:Solvency II | Solvency II]] applies; and in the United States, [[Definition:Credit for reinsurance | credit for reinsurance]] rules govern how cedents can recognize the benefit of reinsurance placed with authorized versus unauthorized reinsurers. Beyond traditional risk transfer, many reinsurance companies have expanded into advisory services, [[Definition:Catastrophe modeling | catastrophe modeling]], data analytics, and direct investment in [[Definition:Insurtech | insurtech]] ventures.

💡 The financial health and strategic behavior of reinsurance companies ripple through the entire insurance value chain. When reinsurance capacity tightens — as it does following major [[Definition:Catastrophe | catastrophic events]] or during [[Definition:Hard market | hard market]] cycles — primary insurers face higher costs for [[Definition:Risk transfer | risk transfer]], which in turn affects the pricing and availability of coverage for commercial and retail [[Definition:Policyholder | policyholders]]. Reinsurance companies also serve as de facto credit intermediaries, since the willingness of a highly rated reinsurer to back a primary insurer's book provides confidence to [[Definition:Rating agency | rating agencies]], regulators, and policyholders alike. Their role in absorbing peak exposures from [[Definition:Natural catastrophe | natural catastrophes]], [[Definition:Pandemic risk | pandemics]], and emerging risks such as [[Definition:Cyber insurance | cyber]] makes the stability and capacity of the global reinsurance market a matter of systemic importance.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Reinsurance]]
* [[Definition:Cedent]]
* [[Definition:Treaty reinsurance]]
* [[Definition:Facultative reinsurance]]
* [[Definition:Retrocession]]
* [[Definition:Credit for reinsurance]]
{{Div col end}}

Definition:Reinsurance company - Revision history

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