What Do Insurance Companies Invest In?

Do insurance companies invest in private equity?

Insurers have particularly focused on private equity and hedge funds.

In 2013, US insurers’ total investments in private equity and hedge funds, including those made without a traditional asset manager as an intermediary, reached 1.5% of insurers’ total invested assets – a 5.9% CAGR from 2008..

What are insurance companies investing in?

Insurance companies tend to invest the most money in bonds, but they also invest in stocks, mortgages and liquid short-term investments.

What are the main assets of insurance companies?

Life insurance companies typically accumulate the largest dollar amount of invested assets, because of the “asset intensive” nature of their products, such as life insurance and annuities. Assets of life insurers are primarily invested in medium- and longer-term taxable fixed-income investments.

How do insurance companies make their money?

Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage, then reinvesting those premiums into other interest-generating assets. Like all private businesses, insurance companies try to market effectively and minimize administrative costs.