7. Reinsurance reduces competition among insurers:
As insurance companies rely on each other to minimize their risk, this cooperation leads to goodwill among each other in the industry. Henceforth, reinsurance helps to control competition and boost the morale of the employees in the insurance business.
8. Reinsurance helps in stabilizing profits:
Reinsurance stabilizes a company in all dimensions including profits earned by the insurance company. However, if the bigger risks are still retained by the original insurer, their profits can greatly suffer by big claims.