Transfer of loss portfolio in respect of claims on the cedant’s future business. The terms are adjustable according to the volume of business. The reinsurance recoveries follow the loss pattern of the cedant. The effect is to transfer liabilities to the balance sheet of the reinsurer in return for a premium reflecting the time value of money with the timing and investment risks being assumed by the reinsurer. The cedant replaces unknown liabilities with a known cost and this helps clean up the balance sheet especially if a merger or acquisition is involved. It is an alternative risk transfer product.