Reinsurance is the transfer of insurance risk (and associated insurance premiums) from one insurance company to another insurance company. The company that receives (or “assumes”) the insurance risk (and associated reinsurance premiums) is called the “Reinsurance Company” and the company that transfers (or “cedes”) the risk (and associated premium) is called the “ceding company”.
Reinsurance is insurance for insurance companies. More specifically, reinsurance involves the transfer of risk from a direct insurer to a secondary insurer (the “reinsurance company”) that receives both premium and a transfer of risk. The reinsurer has no direct contractual relationship with the insured. Reinsurance expands the ability of the direct insurer to provide coverage. The reinsurer also allows the direct insurer to spread risk more appropriately.
About the Author: Josh Miner
Involved in the financial services industry for over twenty years, Josh is a nationally known sales and marketing coach for financial advisors and Managing Partner of Spike Sales, LLC, located in Dana Point, California.
Spike Sales provides comprehensive sales and marketing solutions for financial professionals. Josh has been a speaker and content provider for the Fortress and is our Marketing Director. Fortress partners with Spike Sales to handle the management of the day to day marketing functions. Spike Sales team oversees advisor support, web technology management, business development and many other valuable functions needed in today's ever-changing marketplace.