Liquidity Management in Insurance Portfolio Strategies

DEF Insurance Company is evaluating its investment portfolio to ensure its alignment with both regulatory requirements and the long-term obligations to its policyholders. The company has recently experienced a downturn in one of its key asset classes, leading to concerns about liquidity, capital adequacy, and overall investment strategy. Additionally, the company must navigate the evolving landscape of interest rates, which directly impacts the valuation of fixed-income securities. Given this context, the investment committee is considering adjustments to the portfolio's duration, credit quality, and liquidity profile to maintain a strong risk-adjusted return. Which of the following strategies would be the most appropriate for DEF Insurance Company to implement in response to these challenges?