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Reinsurance is insuring the insured risk.
Co insurance involves multiple companies participating in underwriting the same insured risk.
Contribution : When the same insured risk has been insured with different insurance companies for the same peril but as different risks not as co insured risk , then when a claim arises , all insurance companies involved have to pay up the claim up to the proportion of risk insured.
The difference is simply that co- insurance in reinsurance mean that many insurance companies or reinsurance companies participate together and contributes to cover one risk in other words ( many reinsurers shares to cover a single risk.
While contribution doctrine operates when an insured insure his property with a multiple insurance companies . i.e the insured have two or more insurance polices from different insurance companies covering the same property during a same period. hence each one of the insurance companies being liable proportionally when losses occurred or take place , that to say the responsibility here is a collective responsibility and the obligation is not rely upon one insurer.
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