In 1982 the United States insurance industry, including orioerty and liability as well as life and health insurers, invested $52.6 billion of new funds in the United States economy. This made the insurance industry the third largest institutional investor in te United States in 1982, with 10.4% of all new investments. Only commercial banks and federal loan agencies accounted for a larger percentage of investments funds. Life and health insurers alone accounted for 8.2% of all new investment in the United States economy, and Canadian life and health insurers held a similar position in the Canadian economy.
Since a primary role of insurers is to provide protection against risk, many people are unaware of the important part which insurers play in providing funds for a stable economy. Insurance companies receive vastsums of money, largery in the form of premium payments. Successful investment of such money and reinvestment of the proceeds of maturing investments are necessary to guarantee that insurers can fulfill all contractual commitments to policyowners. This continuous infusion of large qualities of money into the economy places insurance companies among the most important financial institutions in the United States and Canada.
Financial institutions are organizations which help to channel funds through an economy by accepting the surplus money of savers and supplying that money to borrowers, who pay to use the money. Payment for the use of money is called interest. This interest is paid to the financial institutions, and the financial institutions transfer a portion of the interest to the savers. Financial institutions take many different forms and have many different characteristics. They include, for example, commercial banks, saving and loan associations, mutual funds, and life and health insurance companies. In a manner of speaking, financial institutions process and trade money just as other industries process and trade soy beans, oil, and iron ore. Money is regarded by financial institutions as a commodity which is borrowed and loaned to satisfy the needs of gaverments, business, and individuals and to encourage the development of an economy.
In their role as financial institutions, insurance companies provide funds for building office complexes, shopping centres, new homes, and apartements. They have even provided funding for major construction projects, such as the Alaskan pipeline. They invest in oil exploration and the development of new sources of energy. Through their different types of investments, insurance companies not only provide financial support for the economy but also provide policyowners with a means of investing their own money and making it grow.
…….taken from Life and Health Insurance Companies as Financial Institutions…….
Tidak ada komentar:
Posting Komentar