The method by which insurance companies spread their risk to other insurance companies is called?
Answer Details
The method by which insurance companies spread their risk to other insurance companies is called "re-insurance". This means that an insurance company transfers a portion of the risks it has taken on to another insurance company, in exchange for a portion of the premiums it has collected. This helps the original insurance company reduce its overall risk exposure, ensuring that it can pay out claims even in the event of large losses or disasters. Essentially, re-insurance is like insurance for insurance companies.