What is financial engineering in the context of general insurance business?
Briefing Note 1 (BN001/2005) 17 March 2005 Financial engineering is an umbrella term that in this context is used to refer to types of reinsurance arrangements where typically the transfer of risk is small relative to the premiums and the accounting effect may be very different from the economic effect of the contract. Their use can therefore result in misleading accounts and it is sometimes claimed that they may be entered into primarily for this purpose rather than for bone fide commercial reasons.
