Final answer:
The primary assets for an insurance company are financial assets, as they rely on income from insurance premiums and investment income from fairly safe, liquid investments to ensure they can pay out claims and generate profit.
option b is the correct
Step-by-step explanation:
The question pertains to identifying the primary assets for an insurance company.
Financial assets are the correct answer. Insurance companies heavily rely on the income they receive from insurance premiums and investment income.
These companies collect premiums from policyholders and invest a portion of these funds into various financial assets, such as certificates of deposit, stocks, bonds, etc., which are relatively safe and liquid investments.
This strategy enables them to generate income from the investment while also ensuring they can pay out claims in the event of a major disaster.
Financial assets are crucial because they provide a return and thus are a key component of an insurance company's profit margin. On the other hand, the major costs for insurance companies include paying out claims and the administrative costs of running the business, such as hiring workers and processing insurance claims.