Industry Analysis & Industry Trends
The Global Reinsurance Carriers industry provides support to direct insurance markets all over the world. Resinsurers assume part or all of the liability for one or more insurance policy and compensate insurers within contracted parameters for predescribed losses incurred under that insurance policy. This transfers part or all of the risk to reinsurers, helping insurers to increase their capacity and limit their liability. In a process known as retrocession, reinsurers use other reinsurers to manage their own risk. The global reinsurance market then spreads this risk across more companies and countries, thereby maximizing the spread of risk and protection against unforeseen losses... read more
Starting a New Business
Regulations for reinsurance tend not to be as high as for primary insurance industries. Reinsurers normally have to apply for an operating license in each of the countries they seek to operate. Gaining a license generally requires reinsurers to demonstrate a solid operating record, healthy balance sheet and excess surplus to suffice all ordinary contingencies in addition to minimum capital requirements. In establishing operations, reinsurers must also submit regular performance reports and continue to conform to minimum capital and solvency standards.
The need to meet minimum capital requirements imposes substantial start-up costs on reinsurers. This presents another major hurdle for entry into the industry... read more