Reinsurance slashes insurance costs, lightening shareholder burden under Solvency II
Reinsurance can help insurance companies reduce the amount of money they need to set aside for emergencies. By changing the type of reinsurance they use, companies can lower their required capital under new rules called Solvency II. A study found that a specific type of reinsurance called financial quota share is the most efficient way to reduce the needed capital. This means companies can save money by using this type of reinsurance instead of other options.