Insurance companies cede part of their risks to reinsurers; thus, a reinsurance company is an insurance company's insurance company. This situation enables insurers to underwrite a larger amount of business than would otherwise be possible, by protecting them both from a series of small losses and from a single big loss arising out of a major catastrophe.
Dependence on foreign reinsurance is much more persistent than dependence on foreign insurance. With an increasing number of countries limiting or excluding direct foreign participation in national insurance markets and restricting the foreign ownership of insurance companies, international reinsurance is gaining in importance in the international arena. Even in countries where the insurance sector has been totally nationalized, dependence on foreign reinsurance cannot be eliminated altogether. This is particularly the case in developing countries, where the premium income is relatively small and where large risks cannot be covered by the premium receipts generated there. Developing countries are concerned about the cost of foreign reinsurance for two main reasons. The first is the cost in foreign currency and the second is the negative impact that excessive recourse to reinsurance has on the growth and development of the domestic insurance industry.
The Encyclopedia of World Problems and Human Potential is a collaboration between UIA and Mankind 2000, started in 1972. It is the result of an ambitious effort to collect and present information on the problems with which humanity is confronted, as well as the challenges such problems pose to concept formation, values and development strategies. Problems included are those identified in international periodicals but especially in the documents of some 60,000 international non-profit organizations, profiled in the Yearbook of International Organizations.
The Encyclopedia includes problems which such groups choose to perceive and act upon, whether or not their existence is denied by others claiming greater expertise. Indeed such claims and counter-claims figure in many of the problem descriptions in order to reflect the often paralyzing dynamics of international debate. In the light of the interdependence demonstrated among world problems in every sector, emphasis is placed on the need for approaches which are sufficiently complex to encompass the factions, conflicts and rival worldviews that undermine collective initiative towards a promising future.
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