Quick Asset

What Does Quick Asset Mean?

Quick assets are assets that can be quickly converted into cash. Cash itself is typically considered the primary quick asset.

Insuranceopedia Explains Quick Asset

Insurance companies sometimes face periods of exceptionally high claim volumes, such as during a natural disaster. In these situations, they may sell off quick assets to increase their available cash. How well an insurer handles these surges depends partly on the types of policies it writes, since homeowners insurance covering natural disasters can produce large, concentrated losses in a short period.

Quick assets can include accounts receivable and securities like stocks. Insurance companies often hold substantial stock investments, using the premiums they collect to generate higher returns. These stocks can be quickly converted to cash when needed. The size of those investments ties back to how much premium an insurer collects, which is why understanding how business insurance premiums are calculated matters for gauging a company’s overall financial position.