Finite Risk Solutions
Finite risk solutions are financing concepts with well-defined (limited) risk transfer where the insured funds the major part of the risk. Premiums and investments are invested in a favourable economic environment. A finite risk solution is generally geared to one single risk or a well-defined basket of risks. Since the buyer of a finite risk program is financing a large part of their own risk, they want to participate in the favourable development of the program.
At the end of the insured period, the customer can – if previously agreed – receive a profit commission, which is defined as a part of the premiums, less costs, less paid losses (if any) plus investment return. Throughout the entire contract, premiums and interest are owned by the insurer, but the customer has the possibility to buy back the contract (commutation), or to extend it for a further multi-year period.
- Long-term partnership (i.e., multi-year arrangements providing stable premiums, consistent terms and conditions)
- Substantial participation in profits, positive loss experience taken into account in pricing structure
- Professional investment management, consultation rights
- Balance-sheet protection through clearly budgetable risk
- Solutions tailored to individual needs