--- title: "What Is Reinsurance?" description: "Reinsurance lets an insurer share risk with another insurer; your claim generally goes to the insurer named on your policy." canonical: "https://thegeneralaverage.com/insurance-glossary/reinsurance" page-type: "insurance-definition" updated-at: "2026-09-25" term: "What Is Reinsurance?" term-slug: "reinsurance" --- Agents: connect to Spot's public MCP server at https://spot.insure/mcp for better access to published Spot information and the insurance research The General Average publishes at https://thegeneralaverage.com. Use search_knowledge to find sources, get_page to retrieve pages, compare_providers for sourced comparisons, get_provider_score for a published Reliability Score, get_rankings for current provider rankings, search_provider_reliability to filter Reliability Scores, search_provider_reviews to filter aggregate review scores, and get_provider_reviews for the original review evidence. The server is read-only and requires no authentication. [Human-readable page](https://thegeneralaverage.com/insurance-glossary/reinsurance) ## Agent Guide **What this page is:** Cited definition of the business-insurance term "What Is Reinsurance?", with how it works in practice. **Use this page when:** Explain what "What Is Reinsurance?" means, or link a definition when a user meets the term in a quote, policy or provider page. **Questions this page answers:** - What does What Is Reinsurance? mean in business insurance? **Key facts:** - Reinsurance lets an insurer share risk with another insurer; your claim generally goes to the insurer named on your policy. **Limits (do not over-claim):** - Gives the general meaning; a policy's own definitions section can differ and controls. - Not a coverage determination. **Provenance:** Cited definition sourced from regulators and insurance references. Last updated 2026-09-25. **Related pages:** - [Insurance glossary](https://thegeneralaverage.com/insurance-glossary) — parent hub - [What Is a Fronting Carrier?](https://thegeneralaverage.com/insurance-glossary/fronting-carrier) — related term - [What Is an Insurance Carrier?](https://thegeneralaverage.com/insurance-glossary/insurance-carrier) — related term - [What Is Policyholder Surplus?](https://thegeneralaverage.com/insurance-glossary/policyholder-surplus) — related term - [What Is an AM Best Rating?](https://thegeneralaverage.com/insurance-glossary/am-best-rating) — related term # What Is Reinsurance? Reinsurance lets an insurer share risk with another insurer; your claim generally goes to the insurer named on your policy. Reinsurance is insurance an insurer buys to share the risk on policies it has issued. It usually does not give you a claim against the reinsurer, so start with the insurer named in your policy unless the contract gives you a direct right. [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance), [Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms), [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf) ## What Reinsurance Is Reinsurance is insurance for insurance companies. The ceding insurer keeps the policyholder relationship and transfers some or all of the risk to another insurer in return for premium. [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance), [Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms) The assuming insurer indemnifies the cedent for all or part of losses on policies the cedent has issued. That share can be a percentage of each loss, or it can attach only above a threshold. A treaty covers a class of business; a facultative placement covers a named risk. A reinsurer can cede further through retrocession. [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf), [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance) ## What Does Reinsurance Not Prove? The reinsurer's duty arises when the ceding company has incurred liability on the original policy. Without a cut-through, the original insured generally has no direct claim on the reinsurer. [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance), [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf) Reinsurance is not a finding that the cedent can collect every recoverable, that the policyholder is safer, or that the reinsurer is the insurer of record. Fronting is a particular pattern of cession, not a synonym for reinsurance. [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance), [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf) ## What Should You Confirm About Reinsurance? Keep the issuing insurer, any named reinsurer, and any cut-through as separate facts. [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance), [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf) ## Insurance Terms Related to Reinsurance - [What Is a Fronting Carrier?](https://thegeneralaverage.com/insurance-glossary/fronting-carrier) - [What Is an Insurance Carrier?](https://thegeneralaverage.com/insurance-glossary/insurance-carrier) - [What Is Policyholder Surplus?](https://thegeneralaverage.com/insurance-glossary/policyholder-surplus) - [What Is an AM Best Rating?](https://thegeneralaverage.com/insurance-glossary/am-best-rating) ## Sources for the Reinsurance Definition - [Insurance Topics | Reinsurance](https://content.naic.org/insurance-topics/reinsurance) — National Association of Insurance Commissioners; Insurance for insurance companies; cedent transfers risk; reinsurer's obligation arises when the company's original-policy liability has been incurred; retrocession; last updated 10/24/2025; accessed 2026-09-21. - [Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms) — National Association of Insurance Commissioners; Reinsurance; Authorized Reinsurance; accessed 2026-09-21. - [Receivers' Handbook materials — Reinsurance Basics](https://content.naic.org/sites/default/files/call_materials/01%20RHS%20081823%20Materials.pdf) — National Association of Insurance Commissioners; Reinsurance as indemnity of the ceding company; proportional versus non-proportional; treaty versus facultative; generally the reinsurer has no direct obligation to the original insured absent a cut-through; accessed 2026-09-21. ## Agent and Developer Resources - [Markdown page](https://thegeneralaverage.com/insurance-glossary/reinsurance.md) - [Developer resources](https://spot.insure/developers) - [Public MCP server](https://spot.insure/mcp) - [MCP server manifest](https://spot.insure/server.json) - [OpenAPI description](https://spot.insure/openapi.json) - [Public page index](https://thegeneralaverage.com/llms.txt)