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Hunterrose242 t1_j23p6np wrote

Reply to comment by Greedy-Knowledge6043 in Ship insurers to cancel war cover for Russia, Ukraine from Jan 1 by josh252

I appreciate the offer but I was just chuckling at the fact that insurers have insurers.

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Greedy-Knowledge6043 t1_j23undf wrote

It’s a funny concept to wrap your head around!

But for example, think of an area that’s quite for one to natural disasters. Florida, the pending earthquake in California, the Caribbean, Japan’s regular earthquake, tornado alley.

When those natural events occur and wipe out sometimes an entire nation, insurance companies often do not have cash on hand to payout every one of their policies. That’s where reinsurance steps in.

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