____ effectively reallocates a portion of an insurance company's return and risk to other insurance companies.

Question

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Reinsurance is a process where insurance companies purchase insurance policies from other insurers to limit their own total loss exposure. This effectively spreads the risk and potential payouts across multiple companies, allowing the original insurer to take on larger policies while maintaining manageable risk levels.

____ Effectively Reallocates a Portion of an Insurance Company's Return