General insurance Investment of Funds

[Mataracy]

Whenever an Insurance premium is received into fund, any likely claims will arise some time in the future, from a few weeks or months to several years. The insurers must try to obtain the best overall return on the investment of these funds, that is, a mixture of high interest rates and the highest capital appreciation, in order to keep pace with inflation and to increase profits.

The money is not left in the bank vaults for various reasons but mainly because of wide - spread if different types of investment is desirable for safety reasons, and very often better returns are obtained else where.

By making this spread of investments the insurance market helps national and local governments in their short and medium term borrowing, and industry and commerce by various kinds of loans and the provision of working capital by taking up share issues. Life and pension funds may be invested in property and leased to various commercial interests.

This latter type of investment has proved to be excellent for capital appreciation over the years and provides an income each year by way of rent.

What is your take concerning this? You can also share your idea and it will go a long way.

 

[Mandy96]

Actually you are right about this because there is surely a relationship between the insurer and fund invested on the premium package of a particular insurance policy that he or she subscribed to. To be honest, I did not really know much about this until I just saw your post.

 

[Godsplan]

Yeah, l agree with the post. When the insurer receives that premium from the insured, they ( the insurers) also don't allow the premium to stay idle for nothing, they also invest either part of it on other projects that will bring them some kind of interest and that helps the economy like how you stated.

 

[Wisdom01]

There are some insurance companies that have stocks and are listed on the stock exchange market for investors to buy. So you could buy them and also hope the profit gained from the insurance company rises in the future and make more profit at the end of the day I think