A method for reducing risk including the steps of holding by a seller a liability having a future value S.sub.1 and determining the present value P.sub.1 of the liability in accordance with the future value S.sub.1. The method also calls for buying the liability by a buyer entity for a value P.sub.2 greater than the present value P.sub.1, thereby providing a first net gain holding the liability by the buyer entity for a period of time and discharging the liability at the end of the period of time for a value S.sub.1 that is less than the future value S.sub.2 thereby providing a second net gain. The present value P.sub.2 is determined according to the present value P.sub.1 and according to a time t years prior to the time at which the value of the liability reaches S.sub.1. The present value P.sub.2 is determined according to the value S.sub.2 and the future value S.sub.1 is known at the time of the determining of the present value P.sub.1. The first net gain is a net gain for the seller and the second net gain is a net gain for the buyer entity. The liability is recorded as a long term debt by the seller and may be at present value by the buyer entity. The buyer entity can be an insurance company.