Proportional Reinsurance
Plain English Definition: A reinsurance agreement where the insurer and reinsurer share premiums and claims based on a set proportion.
What Proportional Reinsurance really means for someone with an insurance policy
This arrangement spreads financial risk between insurers, ensuring better coverage and stability in the event of large claims.
Proportional Reinsurance Real World Examples
- Sharing losses from a major hurricane between insurance companies.
- Splitting health insurance claims in a partnership agreement.
- Distributing auto insurance payouts among multiple insurers.