Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

For insurance institutions, is it better to have reinsurance policy? or invest paid premiums?

From a business perspective, as an insurance company that provides insurance services to clients in different sectors, please support your answer. 

user-image
Question added by Deleted user
Date Posted: 2016/12/08
Afzal Biya Bani Shaik Gulam
by Afzal Biya Bani Shaik Gulam , Group Insurance Coordinator , Al-Muhaidib Group of Companies

Dear Brother Zughaibi,

 

Trust my message finds you well.

 

For insurance institutions, is it better to have reinsurance policy? or invest paid premiums?

 

Alternative risk transfer, also known as ART, is the use of alternative techniques to achieve the same hedging and transfer of risk away from a risk bearing entity as with traditional insurance or reinsurance. Alternative risk transfer enables companies to transfer risks to another party or to capital markets investors and thus receive protection against certain risks the transactions aim to cover.

Alternative risk transfer became popular during the's when insurance capacity issues drove insures and reinsurers to seek new ways to pass on their risks to a third party.

The main areas of alternative risk transfer include risk securitization through catastrophe bonds, insurance-linked securities and reinsurance sidecars, trading of risk through industry loss warranties and weather derivative contracts and transforming capital market risks into reinsurance through transformer vehicles. Other techniques sometimes considered part of alternative risk transfer include Captive insurance companies, life insurance linked securitization, longevity risk transfer and other alternative risk financing techniques.

Artemis see's alternative risk transfer as the methods used to transfer insurance risks to the capital markets and we strongly believe in the creation of new risk markets through the convergence of insurance and financial markets. We also see new and alternative means of triggering insurance, such as weather-index insurance, as relevant to the alternative risk transfer market.

 

Conclusion: ART is now replacing Reinsurance and Investment methods of Risk Transferring.

 

Ghadeer Al-jabaree
by Ghadeer Al-jabaree , Internal Auditor , UNRWA

 i think this will depend on company capacity and risk appetite , if company is big enough and able to hand the risk associated with collected premiums it can choose to retain more and invest in (stocks , bond, depend on the its assets liability matching policy) . on other hand if the company is small and risk averse it will choose to re insure  more with rated financial strength reinsurance companies.

Mamoun elbaghir abdalla mhamad Eltayeb
by Mamoun elbaghir abdalla mhamad Eltayeb , Insurance agent / Producer , Albaraka Insurance Company

Thank you for this interesting question , and my answer without any hesitation is that reinsurance policy is optimal way and choice of protection to the insurance company and / or institutions , besides the role that reinsurance placing plays by way of treaty and facultative placing in expanding the insurer's underwriting capacity together with stable and balanced portfolio .

However I think there is a similar reasons between need for insurance regarding the insured and need for reinsurance regarding insurer in the following features :-

1/ risk transfer

2/ protection and indemnity.

3/ bring peace of mind.

4/ risk management

Thanking you with my best wishes.   

Tariq Omer
by Tariq Omer , Sr. Trainer and Consultant Insurance , Watan First Institute

of course reinsurance as the function of insurance itself is risk spreading not concentration.

Abdulaziz Al-Thomairi
by Abdulaziz Al-Thomairi , operation support specialist , KSrelief

I think For financially it's both important to improve deposit amount , but it's takes more risk Regards

Omar Saad Ibrahem Alhamadani
by Omar Saad Ibrahem Alhamadani , Snr. HR & Finance Officer , Sarri Zawetta Company

Thanks 

I support my colleagues answers 

yassine bourouga
by yassine bourouga , Customer service agent , RTA

in insurance company the most important is the risk management so the investment is a secondary , so is better for the company to take the way of reinsurance than invest the paid premiums specially in the high value policies 

Farrukh Afsar
by Farrukh Afsar , Senior Manager , Reliance Ins. Co. Ltd. and IGI Ins Co. Ltd

For insurance institutions, it better to get reinsurance policy.

More Questions Like This

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.