Investment Strategy for Insurance Companies

Consider an insurance company that is evaluating its investment strategy in light of changing regulatory requirements and market conditions. The company has a large portfolio of fixed-income securities, a growing allocation to equities, and a significant amount in alternative investments. In assessing its overall risk management and return optimization, the Chief Investment Officer (CIO) must also consider the liabilities and the necessity to maintain sufficient reserves to meet policyholder obligations.

Given this context, which of the following investment approaches should the CIO prioritize to effectively manage the balance between risk and return, while ensuring compliance with regulatory capital requirements?