REINSURANCE

JYOTHI.G.S MBA99613

INTRODUCTION ‡ The Great Chicago Fire of 1871 gave birth to the concept of Reinsurance as a method of risk bearing ‡ Reinsurance is that branch of insurance that is called the insurer of insurers ‡ Life insurance companies and general insurance companies transfer the excess of their risk acceptances to one or more reinsurers .

such transfer of risk is more in general insurance contracts ‡ Insurance industry views reinsurance mainly as a part of the non-life insurance segment .Cont«« ‡ Due to the nature of the business.

. plant or machinery is beyond the risk-bearing limit of the company. the original insurer may pass on the entire risk or a part of the risk to one and more insurers. This process of transferring the risk is known as µReinsurance¶.Meaning Whenever an insurer considers that the risk on a single life or a consignment.

Reinsurance Pool ‡ Meaning :Reinsurance pool means the collective underwriting of risk by a group of companies in which each participant has defined and predetermined interest in all the business underwritten. .

(former of Managing Director of GIC) ³The secondary insurer¶s raison deter is to accept the risk transferred by a professional insurer either on account of his paucity of capacity or that the exposure is far greater than the level of his retention or it could be for the purpose of ensuring homogenization´ .Ramanujam.Definition In the words of P.B.

Concept of Reinsurance in India After the world war 2nd the need for establishing reinsurance in India was recognized. The insurance companies operating in India were required to make cessions of these two. the India Reinsurance Corporation was established. . This was followed by the establishment of the Govt owned Indian Guarantee & General Insurance Company. To create reinsurance capacity.

reinsurance steps in to assuage the financial losses to the company  Reinsurance is an effective tool to protect shareholder value  Reinsurance as a business mechanism widens the scope of reciprocal business.Advantages to an insurance company from reinsurance  It limits the extent of loss an individual insurer may have to bear  In the event of any unforeseen catastrophe. banking heavily mutuality and interdependence in risk sharing . for reinsurance is mainly a global risk transfer mechanism.

International companies in India Reasons for allowing international companies to India are:  Such a step will expose the Indian market to state-ofthe-art developments in the international markets.  Expertise will be available to the Indian companies in effective assessment of risks and settlement of claims  The move will to the creation of additional capacity. .

Swiss Reinsurance Company Munich ReinsuranceCompany .

Types of Reinsurance Treaties 1. Facultative Reinsurance 2. Treaty Reinsurance .

Reinsurance agreements ‡ Proportional ‡ Non-proportional .

The guidelines on reinsurance issued by the IRDA:  Developing adequate capacity and technical skills  Ensuring the best protection for the reinsurance cost incurred  Simplifying the administrating procedures  Maximizing the retention within India .

‡ Presently all inward reinsurance is handled only by GIC who has set up a special inward reinsurance department called µSwift¶ .

. Oriental India Insurance Co. Export Credit Guarantee Council(ECGC) Cholamadalam MS General Life Insurance Co. National Insurance Co.National Reinsurance Public Sector Companies Agricultural Insurance Company of India Private Sector Companies Bajaj Allianz General Insurance Co. New India Assurance Co. HDFC Chubb General Insurance Co. IFFCO-Tokio General Insurance Co.Insurance Companies transacting Non-Life Business in India General Insurance Corporation of India(GIC). ICICI Lombard General Life Insurance Co.

Reliance General Insurance Co. United India Insurance Co. Royal Sundaram Alliance General Insurance Co.Public Sector Co. . Tata AIG General Insurance Co. Private Sector Co.

Thank You««« .

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