Reinsurance also says the reinsurance, it is the underwriter in the original insurance contract, on the basis of through reinsurance contract, will be covered by the part of the risk and liability to the other underwriter insurance act.Cent gives business is original underwriter or turn a reinsurer, reinsurance person accept reinsurance business. This way of risk transfer is the vertical transfer of the original risk by the insurer, that is, the second risk transfer. The main elements of reinsurance are: transfer of risk liability, reinsurance premium, reinsurance handling fee, reinsurance claim amortization, through reinsurance arrangement.
The earliest existing record of reinsurance is in 1370, when an Italian Marine underwriter for the first time transferred to another underwriter the responsibility of covering the riskier part of a sea voyage from Genoa in Italy to Sluse in the Netherlands. This can be said to be the embryonic form of reinsurance.
Specifically speaking, reinsurance has the following five functions: improve the underwriting capacity, make the insurer to enhance the level of risk awareness, increase business competitiveness; Smooth business experience, reduce the maximum possible loss of insurers, replace unknown claim risk with known reinsurance premium, reduce the risk markup factor in insurance product pricing, so as to improve product competitiveness; Provide professional and technical services. By providing market, new products, business management and other information, reinsurance companies provide underwriting, actuarial, product, business management and other training for employees of the spin-off company, help them develop new products, set up new channels and other business innovation, and provide professional suggestions in business underwriting and underwriting. Provide technical support on insurance clauses and risk control; To improve the financial position, the insurer reduces its own solvency needs by transferring reinsurance premiums and corresponding reserves, obtains handling charges and amortized claims from the reinsurer, improves the profit level, or changes the time of profit distribution, and the corresponding cost paid to the reinsurer is small, so that the financial position changes in line with the needs; To form economies of scale, the reinsurer helps the spin-off company develop new channels or new types of business, reduces the initial investment in system setup and business management, stabilizes the operation results of new business, and accumulates relevant new business experience, so that the insurer and reinsurer can obtain economies of scale at the same time.
Reinsurance is independent from the original insurance and has both a connection and a difference with the original insurance. The main connection between them lies in: they are the dispersion of the risk responsibility, the original insurance is the dispersion of the risk responsibility of the policy-holder; Reinsurance is to spread the risk liability of the insurer. The main differences between the two are as follows:
(1) Different parties to the contract: the two parties to the original insurance contract are the applicant and the insurer;Reinsurance contract parties are an underwriter, the cedant and points, the person has nothing to do with the original policyholder. (2) The subject matter of insurance is different: the subject matter of insurance of the original insurance contract is the property or person of the insured, or specifically the property and related interests of the insured or the life and body of the person;And the subject-matter of the reinsurance contract is original underwriter to separate responsibility, tell people to transfer insurance business part of the original insurance to points into people. (3) The nature of the insurance contract is different: the original insurance contract has the nature of economic compensation or insurance payment;And have responsibility for sex or complementary reinsurance contract, its purpose is to direct the apportionment to the original underwriter underwriting responsibility.
The profits of reinsurance companies mainly come from the sub-premium income of commercial insurance companies, investment income of reinsurance companies, reinsurance consulting and financial risk management and other business income.
