Asset Liability Management (ALM)
Management of assets and liabilities from a comprehensive viewpoint through appropriate asset allocation according to characteristics of liabilities. A risk management method of controlling risks in an appropriate manner while seeking to mitigate risks.
Insurance premiums are accumulated as a policy reserve for payment of future insurance claims and benefits.
Because life insurance is a long-term contract, life insurance companies manage assets by taking into account policy reserve and other liability characteristics in order to ensure future payment of insurance claims and benefits.