What Type Of Reinsurance Contract Involves Two Companies Automatically Sharing Their Risk Exposure?
Reinsurance is a risk-management tool used by insurance companies to limit their exposure to customer losses. Reinsurance contracts can involve two companies automatically sharing their exposure to risks. This type of reinsurance contract is known as a coinsurance contract. How Coinsurance Works In a coinsurance contract, two insurers agree to share in reinsuring a policy …