What type of contract involves one insurer sharing or transferring risk with another insurer?

Reinsurance is the correct answer as it refers to an arrangement where one insurance company (the ceding insurer) transfers a portion of its risk to another insurer (the reinsurer). This practice is vital for managing risk, stabilizing loss experience, and ensuring financial solvency. By transferring part of the risk, the original insurer can protect itself against large losses and maintain its underwriting capacity.

In this context, co-insurance generally involves multiple parties participating in the same insurance policy and sharing the risk proportionally, which is distinct from the reinsurance relationship. Excess insurance provides coverage above a specified limit of retained risk but does not involve sharing risk between insurers. An endorsement is an amendment or addition to an existing insurance policy and does not encompass the sharing or transferring of risk between insurers.