Asset Allocation Strategy Considerations for Insurance Companies

As an investment manager at a mid-sized life insurance company, you are tasked with reviewing the company’s current asset allocation strategy. Given the nature of your liabilities and regulatory environment, it is crucial to ensure a balance between risk and return.

Please discuss the key considerations that the investment committee should account for when developing an asset allocation strategy for the insurance company. Be sure to touch on aspects such as the risk profile of the liabilities, regulatory constraints, and the impact of interest rates on investment returns.