According to an article in the Wall Street Journal:
“Life insurers earn much of their profit by investing customers’ premiums in bonds until claims come due. They have typically favored highquality, long-term corporate bonds.” Insurance companies never know the exact amounts of their future payouts. So, why do they hold large amounts of long-term, relatively illiquid assets, such as corporate bonds, that may be difficult to sell quickly if they need to make payments to policyholders?