A form of reinsurance which considers the time value of money and has loss containment provisions. One of its objectives is the enhancement of the cedant’s financial statements or operating ratios, e.g., the Combined Ratio; loss portfolio transfers; and financial Quota Shares are examples.
Reinsurance transacted primarily to achieve financial goals, such as capital management, tax planning, or the financing of acquisitions.
Reinsurance used for something other than to change the risk profile, usually to enhance the Capital / Surplus position of a legal entity.