Meaning of the word reinsurance in English

What does reinsurance mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.

reinsurance

US /ˌriː.ɪnˈʃʊr.əns/
UK /ˌriːɪnˈʃɔːrəns/
"reinsurance" picture

Noun

insurance that an insurance company buys from another insurance company to protect itself from large losses

Example:
The company decided to purchase reinsurance to mitigate its exposure to catastrophic events.
Reinsurance helps stabilize the insurance market by spreading risk.