Reinsurance weaves a complex web. An insurance company assumes risks.
Then the insurer buys insurance to cover their risk. That's
reinsurance. The reinsurer buys reinsurnace to cover *their* risk. My
understanding is that many companies are both insurers and reinsurers.
Often a reinsurer is reinsuring at several different levels.
Eventually, insurance, a nearly unregulated industry, is reinsured by
Lloyd's of London, a group of wealthy English royals who back their
risk with gold and wealth.
That was a crude description. Here is a website for the Reinsurance
News Network:
http://www.newsre.com/
Here is a list of the top ten insurance losses:
http://www.newsre.com/index.asp?layout=story&doc_id=12211
Andrew Hagen
[EMAIL PROTECTED]
On Sat, 15 Sep 2001 01:24:37 +0000, Rob Schaap wrote:
>>Don't insurance companies insure themselves?
>>I thought it was called reinsurance.
>>
>> That is correct.
>
>But interesting things come up when a really horrible event, or confluence of
>events, occurs. If memory serves, Australia's own HIH got itself deeply into
>reinsurance, and the complexity of relationships that arise out of large
>disasters was such that the beancounters were not able adequately to calculate
>risk. Here you have several thousand deaths, several hundred injuries, lots
>of enforced unemployment, several rebuildings, several large bankruptcies,
>several aeroplanes, a couple of airlines, a couple of airports, a lot of
>suits, and gawd-knows-what-else in the mix. Complexity like that can really
>nail a reinsurer. It nailed HIH. And HIH nailed Australia's insurance
>industry (or rather, its clients) to the wall.
>
>Are there large companies in America who specialise in reinsurance, such that
>risk might be less than ideally distributed?
>
>Yours in particularly ignorant speculation,
>Rob.
>
>
