Without reinsurance, insurance companies would be less likely to insure

Question

Quizplus · Accepted Answer

Reinsurance is a type of insurance that insurance companies purchase to protect themselves against large losses. Without reinsurance, insurance companies would be less likely to insure potential terrorist targets because the risk of a large and costly terror attack would be too great for them to bear alone. Therefore, option A is the best choice. Options B, C, and D are all types of insurance that are commonly offered by insurance companies and would still be possible without reinsurance.

Without Reinsurance, Insurance Companies Would Be Less Likely to Insure