Managing personal finance is similar to managing insurance company

Recently while I am researching insurance's share, I find that we as an working individual, the flowing of money around us is very similar, or even same as an insurance company. Let me compare in head to head below:

First I want to explain briefly how an insurance company works. Insurance company receives premium through underwriting. Throughout the year there are claims coming in and insurance company has the obligation to pay. On top of that, insurance company need to spend money to run the business and spend fee and commission to feed their network of selling agency. Because of the uncertainty of how much huge the claim might be and when the claim might come, the insurance company never can be sure the premium receive in the year can cover the claims in the year (although calculated by actuaries how low the probability might be). So the insurance company will always use the surplus (after deduct claim, management expenses, fee commission, other expenses) whenever possible to invest and build investment asset and investment income. As their investment asset and income grow bigger and bigger, with their liabilities well managed, insurance company can sleep well knowing that almost every claim can be met with no worry.

Now I want to explain about the financial position of a working individual. By working, we earn a salary. Throughout the year there is unplanned spending we need to make, like travel or vacation, car break down, hospitalisation, family commitment, extra shopping, luxury buying, etc. On top of that, there are planned spending and basic need spending for our living. Because of the uncertainty of how much huge the unplanned spending and when it will come (note: growing too old also is an unplanned spending/liabilities), we always save some of our salary to cover that too. We have the choice to invest our saving in fix deposit, equity,, property, bond, unit trust etc. As our investment asset and investment income grow bigger and bigger, definitely need to be faster than the grow of liabilities, we feel more comfortable that we can sail through any of the future unexpected events when they arise with no financial worry.

So, if you feel any insurance company is in better financial condition than you or is managing their money or finance better than you, you can consider investing in that insurance company's share.