In: Computer Science
Q describe some key elements concerning insurance company investments.
Ans: Firstly , let's take an overview of the business model of the Insurance companies .Based on the business model the insurance investments company assuming and diversifying risk.The essential insurance model are involved in polling the risk from the individual one and redistributing it across a larger portfolio.
Insurance companies basically invest in many areas, but the most of them are investment in bonds.This makes the better sense because the bonds are the safest of all investment categories. As we know that the Insurance companies are being in the the business of risk assessment , that would be the low risk from this.The Insurance companies are mostly tends to invest in the bonds but, they should also invest in the stocks,liquid short-term and mortgages investments.
The Life insurance companies categorized their ’ investment , that are the linked investments, non-linked investments and shareholders’ investments.The points that the insurance company investments should insure are :
(a) According to the different geographical distribution (location).
(b) According to the economic enterprises of the country,time and political changes.
(c) According to the number of investments in a security, maturity of security and duration of security.
By following the above points the insurance company boost their investments.With the proper rules and regulations the company make a better growth in it's overall aspects.
THANKS , i think this will give you a better intuition about your question. If you have any doubt feel free to ask in the comment section.