Investments

Investments

Cash and invested assets of property/casualty insurance companies totaled $1.53 trillion in 2014. This represents 88 percent of total assets, which were $1.74 trillion. Most of these assets were invested in highly liquid securities (high-quality stocks and bonds, for example, rather than real estate), which can be sold quickly to pay claims in the event of a major catastrophe.

 

INVESTMENTS, PROPERTY/CASUALTY INSURERS, 2012-2014 (1)

($ millions, end of year)

  Amount Percent of total investments
Investment type 2012 2013 2014 2012 2013 2014
Bonds $907,304 $925,895 $941,934 65.21% 62.45% 61.45%
Stocks 268,125 329,486 345,760 19.27 22.22 22.56
     Preferred 11,943 11,539 14,630 0.86 0.78 0.95
     Common 256,182 317,947 331,131 18.41 21.44 21.60
Mortgage loans on real estate 5,681 7,972 10,008 0.41 0.54 0.65
     First liens 5,427 7,765 9,820 0.39 0.52 0.64
     Other than first liens 254 207 188 0.02 0.01 0.01
Real estate 10,388 9,966 10,162 0.75 0.67 0.66
     Properties occupied by company 8,962 8,475 8,598 0.64 0.57 0.56
     Properties held for income production 1,228 1,249 1,286 0.09 0.08 0.08
     Properties held for sale 198 243 278 0.01 0.02 0.02
Cash, cash equivalent and short-term investments 82,502 83,552 90,749 5.93 5.64 5.92
Derivatives 592 578 637 0.04 0.04 0.04
Other invested assets 109,321 118,316 126,582 7.86 7.98 8.26
Receivable for securities 956 1,491 1,104 0.07 0.10 0.07
Securities lending reinvested collateral assets 2,640 2,637 2,681 0.19 0.18 0.17
Aggregate write-in for invested assets 3,873 2,776 3,282 0.28 0.19 0.21
Total cash and invested assets $1,391,380 $1,482,670 $1,532,899 100.00% 100.00% 100.00%

(1) Includes cash and net admitted assets of property/casualty insurers.

Source: SNL Financial LC.

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BONDS

Property/casualty insurers invest primarily in safe, liquid securities, mainly bonds. These provide stability against underwriting results, which can vary considerably from year to year. The vast majority of bonds are government-issued or are high-grade corporates. Bonds in or near default accounted for less than 1 percent (0.13 percent) of all short- and long-term bonds owned by insurers at the end of 2014, according to SNL Financial.

 

INVESTMENTS, PROPERTY/CASUALTY INSURERS, 2014

(1) Cash and invested net admitted assets, as of December 31, 2014.
(2) Includes mortgage loans on real estate.

Source: SNL Financial LC.

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INVESTMENTS, LIFE/HEALTH INSURERS, 2012-2014 (1)

($ billions, end of year)

  Amount Percent of total investments
Investment type 2012 2013 2014 2012 2013 2014
Bonds $2,543.5 $2,601.5 $2,685.2 74.65% 74.61% 73.85%
Stocks 79.3 82.0 87.8 2.33 2.35 2.42
     Preferred stock 7.8 8.3 9.1 0.23 0.24 0.25
     Common stock 71.5 73.8 78.7 2.10 2.12 2.16
Mortgage loans on real estate 335.6 353.2 373.0 9.85 10.13 10.26
     First lien real estate mortgage loans 333.1 350.1 368.4 9.78 10.04 10.13
     Real estate loans, less first liens 2.5 3.1 4.6 0.07 0.09 0.13
Real estate 20.9 21.4 21.5 0.61 0.61 0.59
     Occupied properties 5.5 5.4 5.5 0.16 0.16 0.15
     Income generating properties 15.4 16.0 16.0 0.45 0.46 0.44
     Properties for sale 0.5 1.0 0.4 0.02 0.03 0.01
Cash, cash equivalent and short term investments 106.6 94.8 100.0 3.13 2.72 2.75
Contract loans including premium notes 127.6 128.5 130.2 3.74 3.69 3.58
Derivatives 41.6 37.8 56.5 1.22 1.08 1.55
Other invested assets 138.6 147.7 164.2 4.07 4.23 4.51
Receivables for securities 2.1 3.2 2.2 0.06 0.09 0.06
Securities lending reinvested collateral assets 10.8 13.8 11.2 0.32 0.40 0.31
Write-ins for invested assets -0.3 1.7 4.0 -0.01 0.05 0.11
Total cash and invested assets $3,407.0 $3,486.6 $3,636.2 100.00% 100.00% 100.00%

(1) Data are net admitted assets of life/health insurers.

Source: SNL Financial LC.

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INVESTMENTS, LIFE/HEALTH INSURERS, BOND PORTFOLIO, 2014 (1)

(1) Long-term bonds with maturity dates over one year, as of December 31, 2014.

Source: SNL Financial LC.

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