I don't think there is a separation between finance and insurance like that. Risk is part of finance as well. For example by bundling loans financial entities c

I don't think there is a separation between finance and insurance like that. Risk is part of finance as well. For example by bundling loans financial entities can pool risk similarly to insurance - but it's not insurance. In fact I'd go so far as to say all of finance is about managing risk because assets (all loans are assets)/financial positions generally fall on a line from <not risky, low-yield> to <risky, high-yield>. This is true for both aggressive speculative hedge fund managers and conservative banks. Everybody (who knows their shit) is following the Kelly Criterion in some way as a result, even if they may not know it. And your competitive advantage as a financial entity is generally to price risk better than other market participants. This still benefits the public because by pooling, commodification of financial instruments, and accurately assessing risk financial entities are able to compete against each other in a mostly-open market leading to competitive and fair pricing.