Key Differences Between Insurance and Reinsurance
When we define reinsurance, we often say that is a type of insurance for insurance companies themselves. This statement gives the impression that the reinsurance contract is very similar to the insurance contracts which individuals enter into. This is not completely true.
There are significant differences between an insurance contract and a reinsurance contract. Some of these differences are quite subtle which is why an average person has difficulty understanding them.
In this article, we will have a closer look at the various differences between insurance and reinsurance.
The fact of the matter is that reinsurance companies are quite different as compared to traditional insurance companies. Every aspect of their business, right from deciding the premium to be received to actually paying out the claim is significantly different from regular insurance companies.
Hence, the reinsurance industry is an industry in its own right with a significantly different risk-return profile as compared to insurance companies.
Related Articles

Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.