|3||Berkshire Hathaway Re||11,577|
|5||Lloyd's of London||7,950|
|7||Everest Re Group||3,875|
|10||ACE Tempest Reinsurance||3,405|
The goal of the reinsurance policy is to transfer the risk of the insurer to the reinsurer. Reinsurance companies basically insure consumer insurance companies who supply coverage for various types of contracts. Most insurance companies have a reinsurance program in place in order to make them more financially secure. Under a reinsurance contract, the reinsurer agrees to pay a portion of the insurer’s losses in return for the premium paid to them by the insurer. Insurers with a reinsurance program in effect are capable of issuing policies with higher limits meaning they can shoulder more risk since a portion of that risk is shifted to the reinsurer.
Due to record losses suffered during recent financial crisis, the top reinsurers fluctuate in their ranks, among them are Swiss Re, Munich Re, and Hannover Re.
While reinsurance aids in making an insurance company’s bottom line more foreseeable by lowering the amount of capital required to supply compensation to policyholders, natural catastrophes are unpredictable and are something that reinsurer’s have to be prepared for, particularly events like earthquakes that can occur any time of the year.