What term describes the arrangement where insurers share claims with other insurers?

The correct term that describes the arrangement where insurers share claims with other insurers is reinsurance. Reinsurance is a vital aspect of the insurance industry, allowing primary insurers to manage risk by transferring portions of their risk portfolios to other insurance companies, known as reinsurers. This arrangement helps insurers to protect themselves from significant losses, especially from large claims that could exceed their capacity to pay.

In a reinsurance agreement, the reinsurer assumes some or all of the risk initially held by the primary insurer in exchange for a premium. This sharing of risk enables insurers to stabilize their financial results and maintain solvency by not being overly exposed to any single claim or series of claims.

The other terms do not accurately describe this arrangement. Co-insurance typically refers to a scenario where two or more insurers cover the same risk, but it does not imply that they share claims in the manner of reinsurance. Underwriting is the process through which insurers assess risk and determine the terms of coverage, while subrogation involves an insurer repossessing the right to pursue a third party for claims paid. Thus, reinsurance is the correct choice, highlighting its role in risk management among insurers.