For an insurance company, the asset-liabilities matching ensures:
A)that insurance policies are not issued at high risk areas.
B)risk minimization so that minimum claims are filed.
C)liquidity so that when claims come due the firm has available cash to pay for losses.
D)transparency among the insurers and the policyholders.
E)that individuals and groups that do not have to ability to pay premiums are not insured.

Question

Quizplus · Accepted Answer

Asset-liabilities matching in insurance is primarily about ensuring that the company has enough liquidity to cover claims when they are due. This involves matching the durations and cash flows of assets and liabilities so that the company can meet its obligations to policyholders without facing liquidity issues.

For an Insurance Company, the Asset-Liabilities Matching Ensures