To us Balance sheet management is a twofold operation
"To us Balance sheet management is a twofold operation, optimising capital resources while minimising and managing risks. We are looking to properly estimate and quantify the risks our balance sheet is exposed to and test and determine ways to control and mitigate and manage these risks. Managing interest rates, inflation rates, liquidity, long term spreads and reinvestments are amongst the risks that need to be evaluated frequently. Simultaneously, both the efficient and effective use of capital resources are critical to long-term sustainability, especially for insurers that want to maintain the protection of long-term liabilities. Capital generation is essential to meet these obligations, which is why the strategic asset allocation is critical to any ALM study and as such for balance sheet management. Additionally, strategic moves such as reinsurances, divestments, and acquisitions such as pension buyouts are an important part of strategic balance sheet management as these can help both help manage risks and improve a company’s competitive position. "
Henk Appelo
Head of Balance Sheet Management, Lifetri
