ATo increase the insurer's risk exposureCorrect AnswerIncorrect Answer
BTo reduce the insurer's risk exposureCorrect AnswerIncorrect Answer
CTo diversify the insurer's investment portfolioCorrect AnswerIncorrect Answer
DTo increase the insurer's premium incomeCorrect AnswerIncorrect Answer
ENone of the aboveCorrect AnswerIncorrect Answer
Solution
Reinsurance is a mechanism where insurers transfer a portion of their risk to other insurers (reinsurers) to protect themselves from large or catastrophic losses.