Financial reinsurance

Financial reinsurance is like a kind of insurance for insurance companies. Insurance companies pay money to another company, or a separate group that funds reinsurance, in case an insurance claim is too expensive for them to cover. This helps to protect the insurance company and the people it covers if something expensive happens, like if a hurricane destroys a lot of homes. The reinsurance company will help to cover the cost of all the expensive claims, so the insurance company won't have to pay them all by itself.