# GDP accounting: Insurance spending belong to which part of GDP?

We know that $$GDP = C + I + G + NX$$, where $$C$$ is household consumption and $$I$$ is private investment. I don't know whether insurance spending (e.g life insurance) belongs to $$C$$ or $$I$$.

• There are two elements to insurance spending: the pooled risk with others and the administration cost (in effect the money made by the insurance company used for its internal costs, wages and profits). There also may be some financial management if the payouts are made much later than the premiums are collected. The first is effectively transfer payments and does not affect GDP. The second is part of consumption $C$ in a similar way to paying fees to a bank for services. The third may lead indirectly to investment spending $I$ if the collected funds are then invested in new physical stuff – Henry Jul 23 at 8:50