What does "reinsurance" mean in Guidewire terminology?

Reinsurance, in Guidewire terminology, specifically refers to the process of transferring portions of risk from one insurer to another. This is a crucial mechanism in the insurance industry as it allows primary insurers to manage their exposure to risk by sharing it with other insurers. This helps stabilize their financial position, particularly in the face of large claims or catastrophic events.

In this context, by engaging in reinsurance, an insurer can reduce the potential impact of high-loss scenarios on their balance sheet. It also enables insurers to underwrite more policies than they might otherwise feel comfortable with, knowing they have a partner that will share some of the risk.

The other options highlight different concepts unrelated to the definition of reinsurance. For instance, insuring the same risks across multiple policies does not inherently involve risk transfer between insurers. Creating new insurance products is about innovation and development in the insurance market, while issuing new policies to cover previous claims relates more to claims management rather than risk sharing. Thus, option B accurately captures the fundamental nature of reinsurance in the context provided.