Question

Insurance companies are large institutional investors.

Answer 1

Insurance companies are large institutional investors. They collect premium from the investors on a regular basis and the claims made by the investors are made irregularly and sometimes claims are not made at all. The premium collected needs to be deployed and so they invest it in securities.

The portfolio made by these insurance companies generate returns and these returns pay off the claims made by the investors. Since, insurance companies are usually large in size , the size of investments made by them is also large.