Asset & Liability Strategy

Organisations moving into run-off find that they need to adopt different Asset & Liability Management strategies from those used in an active underwriting situation. In short, the assets are finite as there is no new premium income. There are however, potentially significant risks impacting the assets in the form of exchange rate, interest rate, liquidity and credit risks. Allied to this, liabilities continue to be uncertain.

Each organisation's asset and liability strategy will be different, depending on: the appetite for risk, the volatility of the liabilities and their business plan for achieving an exit from the run-off environment, e.g. the need to release assets to finance commutations.

Tawa has extensive experience in developing the asset and liability matching strategies to manage your ALM risk in the balance sheet, specifically credit, foreign exchange and interest rate risk. We can assist you in:

• Creating your ALM strategy, taking into account; risks and sensitivities in the model, your business plan, (including your plans for commutation and descaling your business) as well as your appetite for risk.
• Working with your investment managers to model the data that they need to manage your investment portfolio
• Forecasting and performance measurement of the ALM strategy.