In the classic book, Against The Gods: The Remarkable Story of Risk, American economist Peter L. Bernstein iterates that the revolutionary aspect which delineates the boundary between modern times and the past is the mastery of risk. Insurance and reinsurance help in the mastering of risk of any sort by the modern societies.
From managing financial losses in the aftermath of natural catastrophes such as earthquakes to protecting industries against man-made catastrophes such as terrorism, reinsurance helps insurers by providing the financial capacity for sharing of risks, and plays a pivotal role in global risk management. Almost 80% of the insurance cover is backed by the reinsurer; hence, they have the right to determine the price along with the insurer.
