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INSURERS AS INVESTORS |
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OWNERSHIP OF MUNICIPAL SECURITIES
Insurance companies help fund the construction of schools, roads, and health care facilities, and a variety of other public sector projects through their investments in municipal bonds. The property/casualty insurance industry invested more than $320 billion in such bonds in 2005, with nearly one-fourth (23 percent) of the funds going to educational projects, according to a June, 2007 report by the Insurance Research Council (IRC).
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HOLDINGS OF U.S. MUNICIPAL SECURITIES AND LOANS, 2003-2007
($ billions, end of year)
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2003 |
2004 |
2005 |
2006 |
2007 |
Percent change, 2003-2007 |
| Total | $1,900.5 | $2,031.0 | $2,225.9 | $2,403.2 | $2,618.2 | 37.8% |
| Household sector | 704.1 | 742.7 | 821.4 | 877.4 | 912.6 | 29.6 |
| Nonfinancial corporate business | 35.4 | 31.8 | 32.1 | 29 | 32.6 | -7.9 |
| Nonfarm noncorporate business | 2.7 | 4.3 | 4.4 | 5.0 | 5.7 | 111.1 |
| State and local governments | 4.4 | 4.7 | 4.9 | 5.3 | 5.6 | 27.3 |
| Rest of the world | 19.5 | 26.0 | 29.0 | 31.0 | 33.0 | 69.2 |
| Commercial banking | 132.7 | 140.8 | 157.7 | 180.2 | 192.4 | 45.0 |
| Savings institutions | 6.3 | 7.1 | 8.6 | 10.7 | 10.6 | 68.3 |
| Property/casualty insurance companies | 224.2 | 267.8 | 313.2 | 335.2 | 368.7 | 64.5 |
| Life insurance companies | 26.1 | 30.1 | 32.5 | 36.6 | 35.3 | 35.2 |
| State and local govt retirement funds | 4.4 | 1.8 | 1.7 | 1.7 | 0.9 | -79.5 |
| Money market mutual funds | 292.1 | 313.8 | 336.8 | 370.3 | 473.5 | 62.1 |
| Mutual funds | 290.2 | 294.3 | 311.7 | 344.4 | 372.2 | 28.3 |
| Closed-end funds | 89.3 | 89.1 | 89.4 | 89.4 | 91.6 | 2.6 |
| Government-sponsored enterprises | 44.4 | 44.6 | 39.7 | 36.1 | 33.3 | -25.0 |
| Brokers and dealers | 24.9 | 32 | 42.9 | 50.9 | 50.1 | 101.2 |
| Source: Board of Governors of the Federal Reserve System, June 5, 2008. |
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