Financial insurance involves the transfer of risk from the insured to the insurer. Risk distribution is accomplished by spreading risk over time rather than pooling it with other risk for an annual period as is the case with conventional property & casualty coverage.

Financial insurance is a "finite product" which means the maximum loss payable by the insurer is predetermined and aggregated over the term of the policy.

Directly Influenced by the insured's loss & risk appetite/financial experience. Can shield an insured from the swings in insurance markets. Motivation for purchase is the need for alternative risk financing to assist in Balance Sheet & Income Statement Management. Flexible - Products are tailored to meet the specific needs of a client Multi-Year Term - Products are structured as multi-year contracts, making them a strategic risk financing tool. Profit Sharing - If loss experience is better than actually forecast, the insured shares the reward with the insurer. Premiums - Alternative methods for premium collection and financing. Experience Account - Includes the concept of claims paid, premiums earned and earnings on the accout balance thereon. Risk financing is stabilized over time. Coverage can be secured for traditionally "uninsurable" exposures. Earnings and/or cash flow can be stabilized. The variable impact of insurance market forces can be minimized.