The systemic relevance of the reinsurance industry
The systemic relevance of the reinsurance industry

Summary/Abstract: The paper aims to carry out the analysis of reinsurers’ activity in the context of systemic risk. The main purpose of the work is the attempt to answer the question whether the failure of reinsurance companies may create financial instability and systemic risk, which could cause a spillover effect into the whole economy. This article contains the analysis of theoretical and empirical research of the papers and other reports. It also tries to prove that traditional reinsurance activity does not pose systematic risk. However, non-traditional activities of a reinsurance company, non-insurance activity of reinsurers, capital connectedness within insurance groups and financial conglomerates considerably increase the likelihood of posing systemic risk through these institutions.

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