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A reinsurance (also Reassekuranz or assignment period) is the transfer of risk from one insurance to a reinsurance company. It enables the primary insurer to reduce his underwriting risk. In simplified terms, one speaks of the insurance of an insurance company. Reinsurance protects the primary insurance balance sheet, serves as a capital substitute and reduces the impact of major loss events on the results and solvency of insurance companies. The opposite is primary insurance . If reinsurance companies buy their own reinsurance, one speaks of retrocession .


This form of insurance is taken out to cover individual risks or entire portfolios (large number of individual risks with common characteristics). As part of the conditions to be negotiated in the reinsurance relationship, an insurance company (cedant) transfers (ceded) risks in whole or in part to another insurance company (assignee, usually a special reinsurance company). The original insurance company will not be dissolved, nor will its regulatory content be interfered with. The reinsurance contract is a separate contract. The contractual relationship between the insurance company and the policyholder remains unaffected. The primary insurer remains solely obliged to the insured person for benefits from the insurance contract. On the other hand, however, the primary insurer receives (partial) benefits from the reinsurer in the event of damage to the policyholder, provided the risk incurred was covered by the reinsurance. A distinction is made between reimbursement in a certain quota ( quota reinsurance ) or minus a certain deductible by the primary insurer (excess reinsurance).

Reinsurance is also known as the insurance of the insurers. In § 779 Paragraph 1 HGB a. F. (Maritime Trade Law), reinsurance was defined as insurance of the risk assumed by the insurer.

The term must be clearly delimited from other insurance terms such as backward insurance and backdating .

Active and passive reinsurance

A basic distinction is made between active and passive reinsurance.

Active reinsurance describes the business of a reinsurer to offer reinsurance protection to other direct insurers or reinsurers. A primary insurer can also act as a reinsurer. Active reinsurance is also referred to as business assumed in reinsurance or as indirect business.

If a primary insurer or a reinsurer asks for reinsurance coverage, it is passive reinsurance.

Organizational advantages of reinsurance

Reinsurance distributes the burden of major risks , such as earthquake risks , among several insurers around the world. Reinsurers, in turn, diversify these risks geographically and across several lines of business. This stabilizes local insurance markets and ensures the solvency of insurance companies in the event of major loss events. Because reinsurance covers such a broad spectrum of risks, it enables insurers to take out cover for large risks (such as aircraft, industrial companies or the liability of entire corporations). The insured does not have to conclude contracts with different insurance companies.

A reinsurance contract usually involves several reinsurers who share the risk given by the primary insurer as a percentage. The reinsurers also ensure that risks are balanced among themselves with retrocession . In this way, in addition to a balanced risk spread (industry mix), global risk compensation is sought. For this reason, the aim is to spread the risk as broadly as possible geographically (geographical diversification ) in order, for example, to be able to guarantee coverage of regional clusters of damaging events caused by natural disasters , wars or political or economic instability.

Many large corporations have their own insurance companies ( self- insurers , English captives ). They have direct access to the reinsurance market and can reinsure parts of their risk portfolios there.


Reinsurance can be proven in the field of sea transport insurance in Italy as early as the 14th century . After the discovery of the new world, Amsterdam and London were important places in reinsurance. They were later applied to many other branches of insurance.

The Kölnische Rückversicherungs-Gesellschaft was the first professional reinsurance company. It was founded in 1846 and started business in 1852 with the conclusion of the first reinsurance contract. This was followed by the Aachen Reinsurance Company in 1853 , Frankfurt Re in 1857 , the Swiss Reinsurance Company ( Swiss Re ) in 1863 and the Munich Reinsurance Company in 1880 .

Today, such companies are particularly important for the increasing concentration of assets and insurance coverages for the ever larger compensation payments after natural disasters such as earthquakes or hurricanes . The largest loss event to date is likely to have been the damage caused by Hurricane Katrina : the insurance loss amounts to $ 62.2 billion; the total damage is over $ 100 billion. Previously, Hurricane Andrew in 1992 was the largest loss event caused by natural disasters, with insured losses of approximately $ 21.5 billion (converted to 2004 prices). About two thirds of the total loss should be borne by the reinsurers.

Disasters caused directly by humans also lead to ever higher amounts of damage. Since the WTC attacks , this event holds the record as the most costly single event with approximately $ 20 billion insured damage. The sum of the insured claims payments for illnesses caused by asbestos exposure (including asbestosis ) even reaches a multiple of this magnitude, albeit spread over many years (the rating agency Standard & Poor’s estimates that losses of $ 54 billion are known to date and are counting on it a total loss burden of up to $ 200 billion).

Contract forms

A general distinction is made between compulsory reinsurance and facultative reinsurance (reinsurance on a case-by-case basis). With compulsory reinsurance, entire insurance portfolios (for example a motor vehicle liability portfolio) of a primary insurer are reinsured, while facultative reinsurance deals with the higher coverage of a single special risk (such as an airport).

In the case of reinsurance contracts, a distinction is also made between proportionate risk sharing ( proportional reinsurance ), in which the premium and damage are assumed in equal proportions, and non-proportional risk sharing ( non-proportional reinsurance ), in which the damage remains in the deductible of the primary insurer up to a certain amount of damage and the excess the reinsurer will assume the excess.

Relationship between primary insurers and reinsurers

The relationship between the primary insurer and the reinsurer is not regulated by law. The rights and obligations of the contracting parties result from commercial customs. In principle, the primary insurer has a broad scope of action in managing the insurance relationship with the (primary) policyholder, including claims settlement. The reinsurer must follow the regulatory decisions of the primary insurer as long as the primary insurer does not violate the principles of proper business management. Such a violation can exist, for example, in the case of goodwill payments if the primary insurer provides an insurance benefit to an important customer solely in order to maintain the business relationship with the customer.

Primary insurers and reinsurers can make restrictive or expanding provisions in the reinsurance contract. For example, so-called "Claims Cooperation Clauses" and "Claims Control Clauses", which impose additional information and coordination obligations on the primary insurer in claims settlement, are frequently found.

Brokerage and direct reinsurance

Contracts are concluded directly by the cedant or through brokers. When doing business through brokers, several reinsurers are often involved and each one assumes a certain share of the risk covered.

Additional Services

  • Advice and participation in claims research
  • Examination and assessment of special risks
  • Initiation and support of restructuring measures in the primary insurance sector
  • Advice and support in portfolio design, underwriting policy and reinsurance design
  • Advice and support in the area of alternative risk transfer
  • Training of the assignor's employees
  • Advice on the use of EDP systems, development of expert systems
  • Processing of billing transactions
  • Takeover of actuarial tasks
  • Advice and support in non-insurance matters
  • Providing information and contacts to insurance markets

Alternatives to reinsurance

An alternative to reinsurance is co-insurance ( coinsurance ). Several primary insurers join forces to jointly insure a large risk. In contrast to reinsurance, several legally independent contracts are combined in one insurance policy. This form is mainly found with larger project risks, such as the construction of a tunnel or an airport.

In the case of catastrophe bonds, risks are securitized and issued on the capital market in the form of tradable securities. Instead of being transferred to a reinsurance company, catastrophe risks are transferred to the buyers of the bonds. Above all, natural catastrophe risks such as earthquake or storm risks are passed on via cat bonds.

Reinsurance market

In 2009 the world market had a volume of around $ 157 billion ( gross premiums written ), of which around 67% was attributable to the damaging non-life reinsurance. The greatest demand for reinsurance came from North America at 47%. 38% of world demand was demanded from Europe, while Asia and Australia demanded 9% of world demand. The rest of the world asked just 6%.

Overall, an increasing concentration can be observed. The ten largest reinsurers already had a market share of over 40% in the years 2000–2006.

Reinsurance companies and brokers

Reinsurance companies

Some of the reinsurance companies are some of the largest insurance companies today.

The ten largest reinsurance groups (2017) by net reinsurance premium written in billion  US dollars :

rank insurance country Premium in billion USD (2017) Share of non-life insurance
1 Munich Re GermanyGermany Germany 36.4 55.9%
2 Swiss Re SwitzerlandSwitzerland Switzerland 32.3 60.7%
3 General Reinsurance
( Berkshire Hathaway )
United StatesUnited States United States 22.7 78.3%
4th Hannover Re GermanyGermany Germany 18.7 58.6%
5 SCOR FranceFrance France 16.1 40.1%
6th Lloyd's United KingdomUnited Kingdom United Kingdom 10.7 100%
7th China Reinsurance Corporation China People's RepublicPeople's Republic of China People's Republic of China 10.0 35.2%
8th Reinsurance Group of America United StatesUnited States United States 9.8 0%
9 Great West Lifeco CanadaCanada Canada 7.8 0%
10 General Insurance Corporation of India IndiaIndia India 5.8 99.0%

It should be noted that most reinsurance companies also write primary insurance and often have subsidiaries in primary insurance. For example, Ergo is the primary insurance subsidiary of Munich Re in Germany.

Reinsurance broker

The ten largest reinsurance brokers posted a premium volume of around EUR 2.8 billion in 2009.

Following the takeover of Benfield on November 28, 2008, the world's largest reinsurance broker is Aon Benfield, which belongs to Aon Corporation , Chicago.

Ranking according to gross brokerage fee :

  1. Aon Benfield (USA) 1,157.0 million euros
  2. Guy Carpenter (USA) 709.9 million euros
  3. Willis Re (UK) 495.6 million euros
  4. Cooper Gay (UK) € 126.2 million
  5. Towers Watson (USA) 121.6 million euros

See also


  • Peter Liebwein: Classic and modern forms of reinsurance . VVW, Karlsruhe 2000.

Web links

Wiktionary: Reinsurance  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. Peter Liebwein: Classic and modern forms of reinsurance . 2nd Edition. Verlag Versicherungswirtschaft, 2009, ISBN 978-3-89952-455-0 , pp. 569 .
  2. Groundbreaking introduction to reinsurance. In: Retrieved July 29, 2016 .
  3. ^ Weather dictionary - hurricane. In:
  4. Global Reinsurance Market Report (GRMR) of the International Association of Insurance Supervisors (PDF; 762 kB)
  5. ^ Cassandra R. Cole, Kathleen A. McCullough: A Reexamination of the Corporate Demand for Reinsurance. In: The Journal of Risk and Insurance , Vol. 73, 2006, pp. 169-192.
  6. ^ AM Best Company, Inc .: Best's Review - Top 50 World's Largest Reinsurance Groups. 2018, accessed February 15, 2019 .
  7. Journal of Insurance , 21/2010, p 732
  8. Best Review 2009