Love on the rocks

摘要

A happy marriage needs a bit of give and take. So it was, once, between insurance companies and the reinsurers to which they lay off risk. In good times, insurers bought cover for profitable risk, which strictly speaking they did not need. In bad times, reinsurers reciprocated by paying even questionable claims. None of this was explicit; nor, after so many years together, did it need to be. The two parties had prenuptial agreements, called reinsurance treaties, but these were deliberately vague. Sometimes they did not even specify the dates on which insurers' premiums were due. Of course, there were occasional rows, but these were settled in private