New 👉 Ask your RBI Grade B 2025 Preparation Queries Here!!

    Register

    Question

    What is the primary purpose of reinsurance?

    A To increase the insurer's risk exposure Correct Answer Incorrect Answer
    B To reduce the insurer's risk exposure Correct Answer Incorrect Answer
    C To diversify the insurer's investment portfolio Correct Answer Incorrect Answer
    D To increase the insurer's premium income Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Reinsurance is a mechanism where insurers transfer a portion of their risk to other insurers (reinsurers) to protect themselves from large or catastrophic losses.

    Practice Next