Who insures the insurance companies?
Reinsurance companies insure insurers. For a fee, a reinsurer covers insured losses after a specific threshold of losses/claims. Warrren Buffett’s companies (General Re, Geico, etc) both invest and participate in reinsurance pools. They can be very profitable business lines; they can also protect insurance companies from failing (thereby protecting policyholders). There may be banks or investment pools that participate or invest in reinsurance, but a commercial bank would not participate in any form of reinsurance. An insurance company’s bank would process payment, hold deposits, administer payroll/direct deposits, offer loans or lines of credit, and perform similar functions to an insurer as they would to any other type of firm. But an insurer’s bank doesn’t insure an insurance company. The insurance company’s property, plant, equipment, comp, etc, could be self-insured or insured as any other firm would be.
