What Is the Associate in Reinsurance (ARe) Designation?

The Associate in Reinsurance (ARe) is a professional certification in the insurance industry, which emphasizes the skills and knowledge relevant to the reinsurance sector. It is conferred by The Institutes, an organization dedicated to providing accreditation and continuing education to insurance professionals.

Key Takeaways

  • The ARe is a professional designation used in the reinsurance sector.
  • To obtain it, candidates must take a series of self-taught courses and exams.
  • The topics covered in the ARe program include the regulation of the reinsurance industry, industry best practices, and financial accounting, among others.

How the ARe Designation Works

As its name suggests, the ARe is focused on professionals working on the reinsurance sector, which is the segment of the insurance industry dedicated to managing the risks faced by insurance companies themselves. When an insurer wishes to hedge against some of the liabilities they have already incurred, they can offload some of that risk to another insurance company by purchasing reinsurance. In that scenario, the insurer purchasing reinsurance will cede some of the premiums they receive from the insurance holder. In exchange, the reinsurer will assume responsibility for some portion of the risk being insured.

Professionals working in this sector must have a detailed knowledge of the risks faced by insurance companies and the methods used to protect against them. For example, companies purchasing reinsurance must consider the appropriate level of premiums to concede as well as what percentage of their overall risk exposure they wish to hedge against. Ultimately, the profitability of any insurer will depend on these types of pricing and risk management decisions. The ARe designation exists to prepare insurance professionals to operate in this field and perform critical tasks such as interpreting, drafting, and modifying reinsurance contracts.

Candidates who wish to obtain the ARe designation must take a series of exams that cover different aspects of reinsurance contracts and the reinsurance industry. The designation is recommended for reinsurers, claims adjusters, policy underwriters, and financial professionals that may work with reinsurance treaties. To prepare for the exams, candidates take a series of self-taught courses using materials purchased from The Institutes. Depending on the region, instructor-led courses may also be available.

Real World Example of the ARe Designation

The ARe’s course materials are divided into four foundational courses, one elective course, and one exam concerning professional ethics. The Foundation courses include fundamentals of personal and commercial insurances, reinsurance principles and best practices, contemporary issues facing the reinsurance industry, and insurance company operations. The elective courses include finance and accounting, risk financing, and insurance regulation.

Typically, it takes candidates between 12 and 18 months to complete the required courses. Thankfully, many of the courses involved can also be used to obtain other insurance-industry designations such as the Chartered Property Casualty Underwriter (CPCU), Associate in Risk Management (ARM), and Associate in Insurance Accounting and Finance (AIAF). Credit may also be earned toward the Associate in Insurance Services (AIS) and Associate in General Insurance (AINS) designations.