Agreement reinsurance is a reinsurance agreement between two insurance companies. In this agreement, one insurance company agrees to provide reinsurance to another insurance company for a specific line of business or a particular risk.

The primary goal of agreement reinsurance is to help the insurance company to enhance its risk management practices and improve its financial stability. It also helps in reducing the volatility of the underwriting results and ensures continuous insurance cover regardless of the loss events.

Agreement reinsurance can be either proportional or non-proportional. In proportional reinsurance, the reinsurer shares the risks and rewards in the same proportion as the reinsured. In non-proportional reinsurance, reinsurer takes on a specific amount of risk from the reinsured for a specific period.

Agreement reinsurance can also cover various types of risks, such as life insurance, health insurance, property insurance, casualty insurance, and marine insurance.

There are several benefits of agreement reinsurance for both the reinsured and the reinsurer. For the reinsured, agreement reinsurance provides additional capacity to underwrite risks that it would otherwise not be able to handle alone. It also allows the reinsured to transfer some of its risks, reducing its exposure to losses.

For the reinsurer, agreement reinsurance provides an opportunity to expand its business and diversify its risk portfolio. It also helps in reducing the reinsurer`s risk concentration, which in turn increases its financial stability.

Agreement reinsurance is an essential tool for insurance companies to improve their risk management practices and ensure financial stability. It provides a safety net to the insurance companies, ensuring that they can continue to provide insurance coverage even in the event of significant losses.