Company: IBM Business Analytics
Category: Asset Liability Management
Published: 12 May 2014
Asset liability management (ALM) modeling can offer organizations significant business benefits by providing a detailed understanding of the balance sheet, testing strategic decisions and quantifying the impact of risk within the business. However, traditional practices are often hindered by the use of disparate modeling methods and systems to derive a company's overall view of risk. The impact of different approaches and models as key inputs to the risk management process, and the reconciliation which is often required to amalgamate these inputs, can result in a costly, limited and ultimately weakened view of risk.
This white paper outlines a more holistic approach to ALM modeling that captures a detailed view of both the assets and liabilities and the interactions between them in a common framework. This provides a single, consistent source of information that enables insurers and other financial entities to realize the full benefit of ALM as a strategic decision-making tool.