Main reasons why insurance are providing with reinsurance are as follows-

A. Reinsurance is helping in reducing the profit fluctuation as it is helping to control the violent fluctuation in profits of the company.

B. Reinsurance is also leading to increase of the Goodwill of the insurance as it will be helping in boosting the over of confidence and Goodwill of the insurance.

C. Reinsurance will be boosting insurance business as it is assisting in boom of insurance and it is enabling every insura to accept insurance business as the total risk and there are higher degree of management of the risk.

D. Reinsurance is leading to reduction of the liability as it will be spreading the risk and it is helping the insurance to stabilizing the liability.

E. Reinsurance is also stabilizing the premium rates and it is helping to protect the insurance funds.

F. Reinsurance will be helping in reduction of the competition and it will be trying to help to increase the morale of employee in the insurance business and it will also minimise the dealings.