Reinsurance

Reinsurance allows an insurer to cede portions of risks or losses to another professional risk carrier, improving capacity, solvency management, and protection against catastrophic exposure. It does not usually create a direct claim by the original policyholder against the reinsurer, unless a specific structure provides otherwise. Switzerland is a significant reinsurance market, so issues of licensing, supervision, contract wording, collateral, and cross-border risk transfer are practically important. Reinsurance may be proportional, non-proportional, facultative, treaty-based, or combined with alternative risk-transfer techniques.