Reserving liabilities involves the calculation of the amount that the insurer needs to set aside to pay future claims.The investment side includes decisions about asset allocation to achieve the best rate of return on the assets entrusted to the insurer by the policyholders seeking the security.The allocation of assets is necessary to meet the timing of the claims obligations.This activity is called:
A)gentrification.
B)due diligence.
C)redlining.
D)asset-liabilities matching.
E)blockbusting.

Question

Quizplus · Accepted Answer

Asset-liabilities matching is the process where insurers manage their assets to ensure they align with their liabilities, particularly in terms of the timing and amount of claims obligations. This helps in maintaining the financial stability of the insurer and ensuring they can meet future claims.

Reserving Liabilities Involves the Calculation of the Amount That the Insurer