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Coinsurance and Reinsurance - Coggle Diagram
Coinsurance and Reinsurance
When an individual insures with a company, it will share its risks
When is risk sharing needed?
When the risk is large.
When the expose is large.
When the risk is new or not familiar with the insurer.
Driverless Cars
Wearables
Drones
Internet of Things
3D Printers
Telemedicine
Nanotechnology
Co-Insurance
Very common in Malta.
Sharing of risk among other insurers.
The leading office is determined to whom commission is paid.
Risk is taken upon by several insurers known as followers.
When one has to insure a large risk, the insurance company will not let you insure with just one company, but rather you will have to insure it with multiple companies.
Reinsurance
Risk transfer mechanism for Insurers.
Avoid Fluctuations - stability.
Macro Benefits for the economy of the country.
When a customer comes to the insurer they will take the whole risk and if the company does not find a reinsurer than they will be stuck with the whole risk.
Forms of Reinsurance
Facultative
One Off.
Insurer seeks reinsurance when required.
Treaty
Long term agreement between insurer and reinsurer.
Types of Reinsurance
Proportional
The sum insured is shared.
Non-Proportional
The losses are shared.