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How the investment portfolio structure differs between life insurance companies and property & casualty insurance companies....

How the investment portfolio structure differs between life insurance companies and property & casualty insurance companies. Why are they different?

Why property & casualty insurers must be concerned about the yield on their investment portfolio?

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Answer #1

Investment portfolio in life insurance firm will be a short term to long term.

Investment portfolio in property & casualty insurance companies will be a short term.

They are different because the Life insurance have long time in maturity of the insurance policy

But property & casualty insurance companies in which customers will be having a mishap at any point so they need

to repay the claim, short term investment is chosen so it can be easily liqudated.

property & casualty insurers must be concerned about the yield on their investment portfolio because the life insurance have long term so they take a higher risk for return.

In the property & casualty insurers it is not applicable since they are mostly into short term investments

they can't avail a huge return.

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