reinsurance
Coverage for insurers
Reinsurance is insurance purchased by insurance companies to protect themselves against large claims.
When an insurer writes policies with potential payouts beyond what it wants to risk, it transfers some of that risk to a reinsurer: The hurricane losses were manageable because of their reinsurance arrangements.
This allows insurers to take on more business while limiting exposure.
Binding pact between nations
- facultativeCapable but not obligated
- proportionalScaled to match another
- stop-lossAutomatic sell trigger
- surplusAmount exceeding requirement
retrocession · aggregate · layers · layering · sidecars · subscription · slip · placement
Formally surrendering territory or rights
- retentionContinued holding or possession
- capacityMaximum amount containable
- premiumsPayments for insurance coverage
- claimsStatements of truth
losses · indemnity · limit · deductible · reinstatement · commissions
Barrier behind target area
- bufferProtective intermediate space
- cushionStuffed fabric for comfort
- safeguardPrecaution against harm
- stabilityResistance to displacement
resilience · risk management · systemic risk · diversification
One who assumes financial risk
- actuaryFinancial risk analyst
- syndicateCombined group pursuing shared interest
- brokerTransaction intermediary for hire
- Lloyd'sLondon insurance market
intermediary · pool · captive
Capacity to pay debts
- capitalWealth used for investment
- reservesResources held back
- securitizationBundling debts into investable instruments
- collateralSecurity for debt
liquidity · creditworthiness · assets · ratings · leverage · spread · pricing
treaty
Binding pact between nations
- facultativeCapable but not obligated
- proportionalScaled to match another
- stop-lossAutomatic sell trigger
surplus · retrocession · aggregate · layers · layering · sidecars · subscription · slip · placement · renewal
ceding
Formally surrendering territory or rights
- retentionContinued holding or possession
- capacityMaximum amount containable
- premiumsPayments for insurance coverage
claims · losses · indemnity · limit · deductible · reinstatement · commissions
backstop
Barrier behind target area
- bufferProtective intermediate space
- cushionStuffed fabric for comfort
- safeguardPrecaution against harm
stability · resilience · risk management · systemic risk · diversification
underwriter
One who assumes financial risk
- actuaryFinancial risk analyst
- syndicateCombined group pursuing shared interest
- brokerTransaction intermediary for hire
Lloyd's · intermediary · pool · captive
solvency
Capacity to pay debts
- capitalWealth used for investment
- reservesResources held back
- securitizationBundling debts into investable instruments
collateral · liquidity · creditworthiness · assets · ratings · leverage · spread · pricing
- insurancecoverage, underwriting, premium, claims, policyholder
- financial contractsfutures contract, forward contract, derivative, annuity, loan agreement
- financial safetyemergency fund, savings, safety net, nest egg, rainy day fund
- fire insurancefire risk, fire damage, fire protection, fire inspections, fire hazards
- risk managementrisk sharing, risk analysis, risk factor, risk mitigation, risk appetite
- risk protectionhedging, diversification, stop-loss, safe haven, asset allocation