Page 142 - Reinsurance Management IC85

The Insurance Times

is entering in to new portfolio and requires
capacity to write large volumes of business.

iii) Even out results or fluctuations in results caused
by large losses.

iv) To improve or maintain solvency. Any large losses
can severely dent the financial strength of the
insurer.

v) Insurer can aspire to get wide spread of risk with
reinsurance which it would not get from its
domestic market. Reinsurers insuring risks globally
get wide spread of risk.

vi) Insurers entering into new portfolios can take the
expertise of reinsurer in designing of product and
also in pricing as reinsurer may be present in the
same market.

vii) Reinsurance helps smaller companies to compete
with large players in the market.

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