reinsure

Definition

When insurance companies get nervous about their own risk and buy insurance for their insurance—basically, it's Inception for actuaries. This allows insurers to spread their exposure by selling chunks of their policies to other insurers, creating a financial safety net for the safety net. It's how insurance companies sleep at night after selling policies for hurricanes, earthquakes, and other expensive disasters.

Example Usage

The insurance company decided to reinsure 40% of its hurricane policies with a European reinsurance firm before storm season began.

Source: Wiktionary via Free Dictionary API

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