In a rapidly changing world for insurers with many challenges on the horizon, understanding how to optimise asset-liability management is more important than ever, say Bob Swarup and John Townley.
In the aftermath of the credit crunch of 2007–2009, a new joke has been doing the rounds in the rarefied world of asset-liability management.
It goes like this: the real reason behind the financial crisis was that financial institutions forgot ALM 101. On the left, you have liabilities; on the right, you have assets. Unfortunately, on the left, nothing was right; so, on the right, eventually nothing was left.
If you are new to the world of asset-liability management (ALM), you may worry at what passes for humour among your peers; if you are steeped in it, the joke may bring a smile to your lips.
Reinsurance, Insurance, Capital management, John Townley