Objectives of Reinsurance


Objectives
An insurance company chooses reinsurance as a part of its responsibility to cover different risks for the benefit of its policy holders and investors. The important objectives of reinsurance are:

1) To reduce net liability and increase surplus for the insurance company

2) To protect against catastrophies

3) To stabilise the company's overall operating results by reducing the fluctuations in loss experience.

4)To limit liability on specific risks 

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