Reinsurance is an insurance of insurance that the original insurance company, who directly underwrote from original insurance contractor, transfer whole or part of liability of original contract to other insurance company, that is, reinsurance company again contract and agreement.
Methods of Insurance
Quota share or surplus: direct insurer notices risks and contract basis to reinsurer case by case and reinsurer decides whether it underwrites the risk or not.
2. Treaty, automatic reinsurance
Direct insurer and reinsurer make an agreement in advance, which reinsurer underwrites automatically specific insurance contracts specified in the contract during a certain period of time (one year).
Surplus: in this insurance contract, reinsurer is obliged to underwrite the reinsurance contract
Quota share or surplus: a number of reinsurers underwrite jointly reinsurance contracts according to the ratio agreed in advance and divide insurance premium and loss reparation accordingly.