Financial Reinsurance

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Definition: Financial Reinsurance

Financial Reinsurance
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Full Definition of Financial Reinsurance

A type of reinsurance where the premium less a small profit margin is returned to the reinsured in the case of a loss or when the term of the reinsurance contract has expired. Because most of the premium is always returned, there is little to no transfer of risk. This financial management instrument is a way for insurance companies to stash away profits in one year to make up for potential losses in subsequent years without tax penalties. This approach helps smooth the company’s financial results and make the model more consistent.

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https://payrollheaven.com/define/financial-reinsurance/
Modern Language Association (MLA):
Financial Reinsurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
April 24, 2024 https://payrollheaven.com/define/financial-reinsurance/.
Chicago Manual of Style (CMS):
Financial Reinsurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/financial-reinsurance/ (accessed: April 24, 2024).
American Psychological Association (APA):
Financial Reinsurance. PayrollHeaven.com. Retrieved April 24, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/financial-reinsurance/

Definition Sources

Definitions for Financial Reinsurance are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.