Life insurance companies are exposed to interest rate risk because they tend to maintain large,...
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Accounting
Life insurance companies are exposed to interest rate risk because they tend to maintain large, long term bond portfolios whose values decline when interest rates rise.
Why do life insurance invest in these types of long-term portfolios that expose them to considerable interest rate risks?
By contrast, property and casualty insurance companies tend to invest much more in shorter-term securities. How would you explain the difference in investment styles between life and casualty/property insurance companies?
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