When your insurance company needs to protect itself by reducing its potential loss on current policies, it's time to look into life and health reinsurance. Simply put, reinsurance (also sometimes called "reassurance") is when one insurance company gives part of its liability to another insurance company. Not just any insurance company will do, however; you need a company that specializes in life & health reinsurance and will help you assess your business' needs.

Typically, reinsurance is useful when you have a client (or clients) with large policies that could cripple or end your business if they make a claim. With reinsurance, you will share particular policies' losses with another insurance company. In return, you will also share those policies' gains. Although you can find a reinsurance provider for almost any type of insurance policy, the three main categories we'll look at are:

1. Life reinsurance, covering life insurance policies,

2. Health reinsurance, covering health insurance policies,

3. And group reinsurance, covering both life and health reinsurance.

Action Steps
The best contacts and resources to help you get it done

Find reinsurance for life insurance policies

Life reinsurance is a huge global business, mostly provided by a only a few companies. Still, it has a nice growth (about 7.5% per year). The key to obtaining any type of reinsurance is to choose reputable, experienced life reinsurance companies specializing in reinsurance for Americans.

I recommend: Reinsurance Group of America is one of the largest life reinsurers in the world. Wilton RE provides traditional life reinsurance plans to life insurance companies in the United States. ACE Tempest Life Re USA also offers life reinsurance to businesses in the United States.

Rely on health reinsurance companies

It is mostly the 'big boys' who also deal with health reinsurance plans. The smaller companies that are doing well tend to specialize; for example, they might only cover disability policies. Seek a reinsurer with years experience in the health field and a willingness to work with health insurance companies of all sizes.

I recommend: Gen Re offers health reinsurance around the globe, including in the United States. ING Reinsurance is a life and health reinsurance company offering financial and risk-transfer reinsurance products and services to insurance companies.

Seek group life and health reinsurance providers

For group business, you'll need an experienced company who specializes. Most should be able to cover all types of group arrangements, whether complex situations where a creditor has underwritten on a group basis or simple employer/employee group arrangements.

I recommend: Generali USA offers group health and life reinsurance programs. Group Reinsurance Plus is also a reinsurer of group life and disability products.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When dealing with life and health reinsurance companies, it's important to build a relationship with the reinsurer. That includes openly sharing data. In return, a reinsurer should share their own audit results.