General insurance companies, also known as non-life insurance companies provide short tail insurance policies such as household car and health insurance. They insure a fixed period of time, typically up to one year. However, even one year policies have fairly long tails of payments. For example, a car accident can create medical treatment liabilities of many years. However, most of the liabilities are paid out within about a three year period. After the insured year. Insurance companies have many thousands of policies, so overall, in normal circumstances, the claim payments are stable and predictable. In return for taking on these liabilities, the insurance company is paid a premium upfront. The premiums are invested and steadily paid out partly to cover expenses, but mostly to insurance policy holders who have had accidents.

The maturity of a general insurance company's liabilities are shorter than a pension fund, so they will have a more risk averse portfolio strategy with a larger allocation to bonds than equities and some liquid assets. To cover immediate claims, their size and strategy has to support the needs of ongoing and future claims. General insurance companies aim to build a portfolio of assets to match their liabilities to policy holders. They usually have a shorter term investment horizon than pension funds, typically holding less equities. They need more immediate liquidity to meet cash payments to policy holders.