The asset portfolio composition of British life insurance firms, 1900–1965

Abstract

This article examines the investment practices of life assurance firms within the United Kingdom, through an analysis of the asset holdings of the sector over the period 1900 to 1965. The data are drawn from the detailed annual returns to the Board of Trade. Aggregate, sectional and individual company data are used in the study. Major trends in investment practice are identified and analysed; and cross-sectional comparisons are made. The main emphasis is on the contribution of the life assurance sector towards provision of financial support to the British industrial sector. From the beginning of the period a significant proportion of life firms' investments was held in corporate securities, although over time the composition moved away from fixed-interest stock towards share holdings. The study highlights the great variation in investment practice across individual life assurance firms, with no strong evidence of convergence over time excepting investments in equity holdings.