Reinsurance is basically insurance for insurers.

There are broadly speaking two classes of reinsurance:

**Proportional**: Reinsurer covers a risk by taking a cut of the premium and covering any losses in proportion to the amount of risk ceded**Non-proportional**: Reinsurer covers losses in excess of a certain amount for a premium

Proportional reinsurance includes:

- Quota share reinsurance
- % of risk ceded to the reinsurer
- insurer and reinsuer share premiums and losses as they arise on an equal proportion

- Surplus reinsurance
- offers coverage to larger risks above a certain threshold and up to a certain limit of Sum Insured
- the cost sharing of losses is on a proportional basis as follows

Non-proportional reinsurance includes:

- Excess of Loss reinsurance
- reimburses losses above a certain limit to the insurer
- sold on a per risk basis or on an event basis

- Stop Loss reinsurance

- Catastrophe reinsurance