This reminds me of the predator hierarchy (for example, see Colinvaux's "Why Big Fierce Animals are Rare"): the reinsurers spread the risk from various insurers and for various catastrophes around among a pool of meta-insurers. But this pool is necessarily smaller than that of primary insurers, and their risks more likely to be correlated (catastrophes can cause other catastrophes, and multiply primary insurers can be affected by the same catastrophe).
For that matter, I'm also reminded of credit default swaps, and Lehrer's "We Will All Go Together When We Go."
For that matter, I'm also reminded of credit default swaps, and Lehrer's "We Will All Go Together When We Go."