Income generated by investing the assets backing reserves and equity capital of the insurer.
In insurance, investment income encompasses all asset returns: bond interest, equity dividends, property rents and realized gains. It is the counterpart of the float: between premium collection and claim payment, funds are invested. In long-tail lines the float can be substantial and investment income offsets a combined ratio above 100%. In the low-rate environment (2015–2021), income contracted, tightening technical requirements. Rising rates since 2022 have significantly restored it.
Investment income 80,000 EUR / earned premiums 1,000,000 EUR = 8% ratio → operating ratio = 103% − 8% = 95%.
investment income, revenus de placement, rendement des actifs, float income