re-insurance

(insurance) The insurance of insurance companies by other insurance companies for excessive losses. For example, an insurance company might obtain insurance coverage for losses exceeding US$50 million in a single catastrophe in order to limit its maximum liability. In essence, an insurance policy with a US$50 million deductable. Furthermore, reinsurance coverage is often spread out among a group of insurance companies so as to further distribute potential liabilities for losses. See retrocession.