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I was quite surprised when I first learned it, there are insurance companies which specialize in selling insurance to insurance companies in case the insurances they sold have to be paid. See Reinsurance on Wikipedia for example.
Obviously Reinsurance companies might reinsure their claims to other Reinsurance companies until nobody knows who is actually paying.
Similar to packing rotting investments with other investments and selling them to retirement founds, because hey look, there are good investments in it.
Reinsurers don't really take out their own insurance further, at least I haven't heard of that happening. I do work for one of those Reinsurers
My finance teacher said that reinsurance often used financial derivatives to offset risk... is that true? Just made me have a wild flashback to like a couple decades ago.
Maybe I remember it wrong, been a while since I had contact with the insurance industry.
Also might depend on national insurance regulations.
I assume you're right since you are in the sector, but I don't know where I picked up the notion, that reinsurers would reinsure themselves.
To be fair it could happen in some circumstances but I don't think it's normal, there is just no business case, reinsuring works by the insurance company paying a part of the premiums to the reinsurer to insure X amount from the portfolio, reinsurer would have to do the same, you run out of money quite soon.
I don't know that much though, I am new to the company and I am in IT, so it's not my domain to know exactly how it works.