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Automatic reinsurance is generally for the smaller death benefits

and or lower enforces amounts. Automatic reinsurance can have a
lot of legal clauses that need to be take care by the direct

insurance companies.

2.3. Catastrophic reinsurance

This is sometimes called eat cover and protects the insurance
companies against catastrophes of large mortality claims coming at a

single point of time.

This type of reinsurance is purchased by a direct insurance company

for a large block of individuals and not on an individual basis.

3. Learn about the advantage of reinsurance arrangements

3.1. Advantage of reinsurance arrangements

✓Minimize losses –the financial losses of an insurance company are
minimized through transfer or sharing of risk with the reinsurer.

✓Innovation –reinsurer generally have a pool of talent and

knowledge, which helps the clients in knowledge upgrade and
bringing in globally accepted and recognized best practices to their

area of work.

✓Underwriting –insurer companies experience sudden spikes I
volumes at certain times in a year. The reinsurer extends help in

underwriting of cases received by the direct insurer through their
registered offices.

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