In 1991, Tom Cochrane released his famous song, "Life is a Highway," and Congress that year passed a major transportation funding bill. A big year for infrastructure to be sure, and one we are still struggling to push forward. But what is not as well known is that private industry, specifically the insurance industry, plays a big part. Did you know that every year, insurers fund road construction that would build a highway between Washington D.C. and Los Angeles?
The insurance industry is more than just collecting premiums and paying claims, as many people may think. By providing reliable, long-term financing for our economy, the insurance industry has the ability to help build roads, schools, houses, and Main Street businesses. It provides vital contributions to the U.S. economy, and puts policies in place that will help harness growth-generating investments.
Policymakers and the public as a whole should recognize the significant investment the insurance industry provides to the U.S. economy. At a recent event hosted by the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC), a first of its kind report was released, which focuses on the role of insurance investment in the U.S. economy. According to the report, assets of the U.S. insurance industry totaled approximately $5.8 trillion as of December 2017.
U.S. insurers play an especially important role in the markets for corporate bonds and municipal bonds – their investment makes up about 20% of both. These companies invest for different purposes than other institutional investors and play a significant and important role across capital markets. For example, the industry’s investments in education projects through municipal bond purchases could build roughly 1,000 elementary schools every year. Likewise, its annual investments in municipal bonds for transportation projects could build that highway. Read more here.