When an insurer cedes part of an insured's coverage to another insurance company, what is this process called?

The process of ceding part of an insured's coverage to another insurance company is known as reinsurance. This practice allows insurers to manage risk by passing some of their liability to another insurer. Reinsurance can help insurance companies stabilize their financial performance, protect against large claims, and increase underwriting capacity.

In a reinsurance arrangement, the original insurer (the ceding company) transfers a portion of the risk associated with the policies they have issued to a reinsurer. This insulates the primary insurer from potential losses that could arise from claims, effectively spreading the risk.

In contrast, options like underwriting pertain to the evaluation of risk and the decision to accept or reject insurance applications, while assumption refers to a situation where one party takes over the rights and obligations of another. Partnership insurance isn't a recognized term in the insurance industry; it could suggest a collaboration but lacks the specific context of transferring risk that reinsurance provides.