Selection of the Optimum Asset Portfolio to Satisfy Cash Needs [Review]

A major contribution to the success of an insurance company is the protection of its assets and hence net worth from the ravages of inflation. This protection is provided when there is good asset-liability management. There are many strategies which seek to optimize this protection. The author of this paper "Selection of the Optimum Asset Portfolio to Satisfy Cash Needs," has chosen to develop an approach to select efficient portfolios based upon a set of general criteria. The paper is very basic, but does aptly develop from the criteria a selection of net gains or relative protection of net worth indices in Table 4. The author could have gone much further in the treatment of this subject. Since he did not choose to do so, this reviewer will offer a series of thoughts on the subject of inflation and how the actuary can assist in the asset-liability management function.