Insurance is a contract between a policyholder and an insurer, providing financial protection against potential losses or damages. Reinsurance, an integral part of the insurance industry, involves insurers transferring portions of their risks to other insurers. This process ensures stability, enabling larger risks to be underwritten and facilitates the efficient management of the overall insurance market. So, in short, to answer ‘what is insurance and reinsurance’ – they are vital mechanisms for risk mitigation and security.