What type of projects do life insurance companies typically invest in?

Life insurance companies typically invest in long-term, stable projects that can provide consistent returns over time. Retail space and shopping centers fall into this category because they usually offer steady cash flow through long-term lease agreements. These properties can provide reliable income that aligns well with the long-term obligations of life insurance policies, which require the companies to pay out benefits many years into the future.

Investments in retail space also allow life insurance companies to spread their risks across different tenants and locations, thus diversifying their portfolios. The durability of cash flows from established retail tenants contributes to the financial stability desired by insurance companies.

While residential homes, agricultural land, and small business loans may have their merits, they generally do not offer the same level of predictability and stability that life insurance companies seek. Residential properties can be subject to market fluctuations and costs associated with maintenance and management. Agricultural land investments can be influenced by commodities prices, weather conditions, and other unpredictable factors. Small business loans carry a higher risk of default compared to more stable commercial properties like retail centers. Therefore, the choice of investing in retail space aligns best with the objectives and risk tolerance of life insurance companies.