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You can be a small insurer and survive disasters. That's what the reinsurance market is for. Otherwise, local insurance companies would go bust every time there
by lclarkmichalek 12y ago
You can be a small insurer and survive disasters. That's what the reinsurance market is for. Otherwise, local insurance companies would go bust every time there was a geographically localised disaster.
- hnnewguy 12y ago>That's what the reinsurance market is for The risk is still being off-loaded to massive reinsurance companies.
- lclarkmichalek 12y agoMaybe? More likely it's packaged up into a derivative product which can then be spread among any size of institution. There's nothing fundamental about the reinsurance market that requires massive companies; that's the genius of it.