Reinsurance is a form of insurance purchased by insurance companies in order to mitigate risk.

Description Q1. Reinsurance is a form of insurance purchased by insurance companies in order to mitigate risk. Essentially, reinsurance can limit the amount of loss an insurer can potentially suffer. In other words, it protects insurance companies from financial ruin, thereby protecting the companies’ customers from uncovered losses. Questions: a. How do reinsurance companies work?…