What is the term for the transfer of risk between insurance companies?

The term for the transfer of risk between insurance companies is reinsurance. In this arrangement, one insurance company (the ceding insurer) transfers a portion of its risk to another insurance company (the reinsurer) in exchange for a premium. This process helps insurers manage their risk exposure, increase their underwriting capacity, and stabilize their financial performance. By spreading the risk across multiple entities, insurers can protect themselves against significant losses, ensure their ability to pay claims, and continue to offer coverage to policyholders.

Underwriting refers to the process by which an insurer assesses risk when deciding whether to provide coverage and at what premium rate. Risk assessment involves evaluating and analyzing potential risks to determine the likelihood of a claim occurring, but it does not involve the transfer of risk. Policy endorsement refers to a modification or addition to an existing insurance policy, but does not encompass any aspect of risk transfer between insurers.