What is the collateral?

Ensuring is a practice of relieving insurance risks by sharing these risks with another insurance carrier in exchange for payment of this second carrier part of the bonus. This practice makes it possible to write larger policies, but the protected party is still dealing with only the main insurance provider. This simplifies things for the customer and generally does not affect rates. The practice of securing could date back to the 13th century.

Usually, securing is used for larger insurance contracts, but companies can also engage in practice if they do not specialize in a specific insurance product. For example, if a policy that includes health insurance for employees and remuneration insurance is packed, the company's offers can feel comfortable when one other company can handle one of these two divisions. This not only helps to minimize the risks for one company, but also provides an opportunity for a company with a greater expertise to enter and manage these matters.

Despite this apparent benefit, the main reason for ensuring the relief of risk remains. For example, if society has a very large policy or a number of minor high -risk policies, these policies can generate large incomes, but could cause catastrophic responsibility if a major disaster should occur. Therefore, for the overall health of the company, it can look for others to share this risk and pay for these companies a part of the premium proportionally equivalent risk they expect.

While almost all insurance companies have a program of security, there are some that also specialize in this practice. Specifically, they are looking for other companies that have already sold politicians and offer a risk of a certain level of bonus. These companies may not be well known by the name because they are often not in consumerites and therefore do not maintain a large public presence. Furthermore, the claims may still be payableThe main carrier who first wrote this policy, even if the payment comes from another society.

The exact origin of the collateral is not known, but the oldest reports date back to the late Middle Ages. Then companies that focused on maritime cruise insurance were looking for others to share the risk for all unknowns. Furthermore, ships and cargo often had very large values ​​for a time, so companies were often not willing to risk if others could not enter risks and rewards.