4 ms·
Well it doesn't "throw off" so much as provide capital that is available for the medium term; sooner or later the float is eaten into by paying out claims. So,
by tankenmate 10y ago
Well it doesn't "throw off" so much as provide capital that is available for the medium term; sooner or later the float is eaten into by paying out claims. So, by this standard any cash flow positive business will help in this regard. What sets insurance apart is that, all things being equal, insurance is very cash flow positive (quite frequently in terms of years). Obviously some insurance companies realise this and provide a discount on their premiums as they factor this forward liquidity into their pricing; Warren Buffet has said many times that he does everything he can not to follow such (excessive) discounting.