The portfolios of property and casualty insurance companies are generally concentrated in?

Question

a. liquid assets
b. mutual funds
c. U. S. Treasury bonds
d. primary securities

I believe it is: a. liquid assets

Answer 1

Almost positive it is (c). Insurance companies must hold a certain amount of their portfolio in "reserves" that meet "reserve requirements," basically they have to be approved by the NAIC. This is because of insurance regulation and actually drives the insurance cost to consumers up.

Answer 2

Of these choices, I would have to say Primary Securities, whatever they are, but in reality, Insurance companies like to have a lot of long term investments like commercial real estate, that owns office buildings and shopping centers , because it gives good income, rents rise over time, and real estate value rises over the long term. They will have a liquid fund for paying immediate claims, but most of the reserve, is long term assets.