The whole business model of insurance companies relies on the sole fact that the losses won’t occur to all policyholders at once.
What happens in the event of a catastrophe or natural calamity. There will be a huge number of insurance claims, how does the insurance companies tackle this type of situation
apart from reinsurance with other companies are there any other option available with insurance companies
If you observe historical data, there is a very low probability of catastrophic events but yes there is no doubt that catastrophes can occur e.g earthquake, campfire, covid, etc
Insurance companies price their expected losses in premium, their unexpected losses through regular capital under solvency norms, and catastrophes with stressed capital. In case any catastrophic event occurs, the insurance company should have the capital to survive that event. If yes, they can come back to business and revive in the future, if no they have to go bankrupt