Reinsurance is a general practice that insurance companies (insurers) use to share their risk on insurance business with other insurance companies (reinsurers). Generally, when accepting a new business, an insurer would consider how much they would take on their own (refereed to as “own retention”) and how much to give to other reinsurers. This decision is usually based on the capacity and internal policy of a insurer. Some countries, however, have statutory requirement that an insurance company cannot take 100% of a business and therefore must cede a certain portion of their business out.