Arranging reinsurance on a single known risk is known as:

Arranging reinsurance on a single known risk is primarily referred to as facultative reinsurance. This type of reinsurance is applied to individual policies or specific risks rather than to an entire portfolio. When an insurer recognizes that a particular risk exceeds its risk appetite or financial capacity, it can seek facultative reinsurance to transfer part of that risk to another insurer. This allows for tailored arrangements based on the unique characteristics of the specific risk in question.

Facultative reinsurance is beneficial for both the ceding insurer, who can offload excess risk, and the reinsurer, who can carefully evaluate and choose which risks it wishes to underwrite. This detailed assessment is crucial, as it enhances the reinsurer's ability to price the risk appropriately.

In contrast, the other terms listed refer to different aspects of reinsurance. Co-reinsurance typically involves multiple insurers sharing the risk on a specific policy, while retrocession pertains to the reinsurance of reinsurance, allowing primary reinsurers to offload some of their risks. Dual reinsurance usually involves two reinsurers cooperating to cover a single risk but does not emphasize the individual risk approach inherent in facultative reinsurance. Therefore, the definition aligns directly with the concept of facultative reinsurance, making this the