Insurance regulators keep a close watch on how insurers invest premium money because insurance companies handle large pools of customer money. The regulatory logic is simple: premium income must remain safe until claims are paid, even if insurers face pressure to search for higher returns.
Insurers often take a long time to earn underwriting profits. That makes the business structurally different from many other financial businesses. For that reason, investment rules for insurers prioritise capital safety and liquidity over aggressive return-seeking.
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