Life insurance companies and fire and casualty insurance companies are both examples of contractual savings institutions. Because fire and casualty insurance companies have a greater possibility of loss of funds if disasters occur,they tend to hold more ________ assets than life insurance companies.

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Quizplus · Accepted Answer

Fire and casualty insurance companies hold more liquid assets than life insurance companies because they face the risk of having to pay out claims as a result of natural disasters or accidents. Holding liquid assets allows them to have quick access to funds to meet these obligations. Life insurance companies, on the other hand, have more predictable liabilities and can invest in longer-term assets to generate higher returns.

Life Insurance Companies and Fire and Casualty Insurance Companies Are