What characterizes the role of a reinsurance broker?

The role of a reinsurance broker is centered around the placement of risks with other insurers for further coverage, which is captured in the correct answer. Reinsurance brokers serve as intermediaries between insurance companies seeking to manage their risks and other reinsurers who are willing to underwrite those risks. They help assess and structure reinsurance contracts, ensuring that the ceding insurer can transfer some of its risk exposure to another party, thereby achieving greater stability and capacity within its own underwriting processes.

This function is vital as it allows primary insurers to protect their balance sheets and diversify their portfolios, enabling them to take on more business than they could handle unaided. The expertise that reinsurance brokers bring to the table includes knowledge of the market, risk assessment, and negotiation skills, all of which facilitate effective risk transfer and protection for insurers.

The other options do not align with the primary functions of a reinsurance broker. Direct interaction with clients is more characteristic of retail brokers who work with policyholders directly, while reinsurance brokers operate primarily with insurers. A focus solely on local risks would not represent the global nature of reinsurance, where risks can be placed across international markets. Claims handling typically falls within the responsibilities of the insurer or specific claims adjusters, rather than a re