Reinsurance is the process of one entity (the reinsurer) taking on all or part of the risk covered under a policy issued by an insurance company in consideration of a premium payment.
Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.
The option to trade in this highly profitable risk trading is currently controlled by a few large corporations.
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