Cummins, J. David; Dionne, Georges; Gagné, Robert; … - Institut d'Économie Appliquée, HEC Montréal (École … - 2008
Purchasing reinsurance reduces insurers’ insolvency risk by stabilizing loss experience, increasing capacity, limiting … liability on specific risks, and/or protecting against catastrophes. Consequently, reinsurance purchase should reduce capital … costs. However, transferring risk to reinsurers is expensive. The cost of reinsurance for an insurer can be much larger than …