INCOME derived from invested capital as distinguished from income derived from services. In insurance company accounting, investment income is current income (interest, dividends, etc.) from securities held in portfolios, as contrasted with capital gains or losses derived from actual sale of securities, and book appreciation or depreciation on retained securities. Insurance companies generally keep their own dividends to stockholders within investment income alone, thus assuring stability of dividends to stockholders and the "ploughing back" of all other gains (underwriting, turnover of securities, and book appreciation) into surplus. This normally results in large ploughed back gains, with consequent compounding of growth in equity values over a period of years.
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