Introduction

Reinsurance, as the name implies, has developed from insurance business and the extent of its use will depend not only upon the amount but also upon the characteristics of the risks to be underwritten by the direct insurer. The volume of reinsurance business which can be transacted depends primarily upon the volume of direct business available at any given time. The idea of reinsurance is rooted in the same human instinct that brought insurance into being, that is, the desire that the loss of one shall be shared by many.