Reinsurance is a financial arrangement wherein an insurance company transfers a portion of its risk to another insurer, known as the reinsurer. This process helps the primary insurer mitigate potential financial losses resulting from large or unex...

Reinsurance is a financial arrangement wherein an insurance company transfers a portion of its risk to another insurer, known as the reinsurer. This process helps the primary insurer mitigate potential financial losses resulting from large or unexpected claims. Reinsurance serves as a strategic risk management tool, allowing insurance companies to protect their financial stability and capacity to underwrite policies. Reinsurers assume a predetermined share of the risk in exchange for a premium paid by the ceding insurer. The reinsurance market in India is propelled by several key drivers, each influencing the industry's dynamics. The growing complexity and frequency of catastrophic events, such as natural disasters, underscore the need for robust risk mitigation strategies. Consequently, insurers seek to share and transfer risks through reinsurance arrangements. Moreover, advancements in technology have enabled insurers to better assess and quantify risks, fostering a more nuanced understanding of their portfolios.