Insurance is something we already know; it protects us against certain risks. But what about reinsurance, is it a new term for you? Let’s clarify it below.
A reinsurer is a company that assumes part of the risks covered by an insurer. This means that it acts as a financial support for insurers, helping them to deal with increasingly complex risks and react quickly to problems.
The main purpose of taking out reinsurance is to share the risks, so as to limit the financial impact on a direct insurer, especially in cases of serious claims.
The reinsurer has specialized knowledge and experience in various markets, which allows it to offer technical assistance to insurance companies, helping them to better understand complex risks and reducing their risk exposure.
Thus, reinsurance plays a key role in the insurance market, making it more stable and efficient to protect policyholders against possible adversities.
How does reinsurance work?
Reinsurance occurs when a direct insurer takes on a risk proposed by the client. However, in order not to be fully exposed to this risk, the insurer signs a contract with a specialized company, called a reinsurer.
In this contract, the reinsurer undertakes to reimburse the direct insurer in the event of a claim, assuming part of the risks covered. In return, the insurer reimburses part of the insurance premium paid by the insured.
This contract may cover a portfolio of risks located in the same market. It is important to note that the reinsurer works only with insurers, so reinsurance can be considered secondary insurance, while primary insurance is represented by the insurer that directly assumes the risk.
In this way, reinsurance allows insurers to better manage their risks, making the insurance market safer and more stable.
What are the types of reinsurance?
Eventual reinsurer: companies based abroad that do not have a representative office in Brazil. They need authorization from the Superintendence of Private Insurance (SUSEP) to operate in the reinsurance market.
Admitted reinsurer: foreign companies that have an operational structure in Brazil. They are authorized by SUSEP to operate regularly in the country’s reinsurance market, following local rules and regulations.
What does Pryor Global have to do with it?
Pryor provides legal representation to companies in this specific segment and has a solid track record of representing clients before SUSEP. If you are looking for a partner company, count on us!
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