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The Mismatch in the Insurance Industry
In the wake of these banking stresses, we've seen a big problem being this maturity mismatch where banks were holding longer duration assets so they then had to sell in order to meet a gap between deposit outflows. Do insurance companies typically hold their longer duration assets to maturity? Is there anything like a mismatch in the industry? Great question and the answer is absolutely not. What these insurers typically do is they match the maturity of their assets to the mature of their liabilities so that they don't have to forcibly sell assets before they're ready.
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