Introduction to Asset Management

Valuation requires an understanding of an insurance company’s assets. The purpose of this session is to give a basic introduction to the stock and bond markets. The accompanying session on Liability Management will introduce the liability side of asset/liability management. It is strongly urged that both of these sessions be attended for maximum benefit. For this session, particular attention will be given to investment instruments most commonly held by insurance and reinsurance companies. For bonds, the various issues relating to interest rate risk management will also be discussed (duration, convexity, and cash flow testing for example). Finally, brief explanations of short-term investments and other miscellaneous assets will also be given.