Why is it sometimes called financial reinsurance?
Finite risk reinsurance is an agreement that transfer a limit amount of risk to the reinsurer. It has an object of improving the primary insurer’s financial results like modifying ceded companies’ balance sheet. Also, from the perspective of the characters of finite risk reinsurance, primary companies can receive the profits of investments shared by reinsurer and can well do the investment themselves because they pay the premium term by term so that they have better financial liquidity. Due to that function or characteristics, the finite risk reinsurance could also be called financial reinsurance.