Which categories are the two most prominent for life insurer investments?

The two most prominent categories for life insurer investments are bonds and mortgages. This is primarily due to the nature of life insurance companies and the liabilities they manage.

Life insurers typically have long-term liabilities, such as policyholder benefits that may not be payable for many years down the line. As a result, they invest in assets that provide stable, consistent returns over time, which aligns well with their obligation to meet future claims. Bonds, particularly government and corporate bonds, are appealing because they tend to have lower risk and provide fixed interest payments. This predictability is crucial for financial planning and ensuring that the insurer can cover their commitments to policyholders.

Mortgages are another popular investment choice for life insurers. By investing in mortgages, these companies can secure a steady stream of income through interest payments while also investing in an asset that typically appreciates over time. This dual benefit of income generation and asset value growth makes mortgages an attractive option.

In contrast, while stocks and real estate can offer growth potential, they also come with higher volatility and risk, which may not align with the stability needs of life insurers. Other options, such as equities and commodities or real estate and mutual funds, also carry a degree of risk or uncertainty that life insurers often prefer to avoid. Therefore