What is the primary function of a reinsurer?

The primary function of a reinsurer is to offer insurance for insurers to reduce their exposure to loss. This allows insurance companies to manage their risk more effectively by passing on a portion of their risk to another entity capable of taking on that risk. Reinsurers help primary insurers maintain stability and solvency by absorbing some of the financial burdens associated with large claims or catastrophic events. This process is crucial in maintaining the overall health of the insurance market, especially in times of significant loss.

The other options do not accurately define the role of a reinsurer. Providing insurance directly to policyholders is the function of primary insurers, not reinsurers. Operating under a non-profit model is not a standard characteristic of reinsurers, as many are profit-driven businesses that play a critical role in the insurance industry. Additionally, issuing certificates of insurance is a function typically performed by primary insurers as proof of coverage for their policyholders, which is distinct from the role of a reinsurer.