CIIM Practice Questions - CIIM Chartered Insurance Investment Manager Exam

Why is duration matching central to insurance ALM?

It guarantees the insurer will never have a loss It eliminates credit risk from the portfolio It limits the change in surplus when interest rates move by aligning asset and liability sensitivities It allows the insurer to skip statutory reporting

Correct Answer:

It limits the change in surplus when interest rates move by aligning asset and liability sensitivities

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