Froogle | Glossary | 'Asset-Liability Matching'

ASSET-LIABILITY MATCHING

the practice of getting assets to satisfy liabilities. The satisfaction requires the dollar amounts to meet. Plus – and most-commonly performed by insurers – the satisfaction requires the timings/durations to meet.

EXAMPLE:

ABC Co. anticipates that it will have ^$10M in liabilities this year; ^$11M in liabilities the next year; and ^$12M in liabilities the year-after-that. Therefore, the insurer acquires [three separate] assets that will mature at ^$10.1M this year; ^$11.1M next year; and ^$12.1M the year-after-that (respectively). ABC Co. got these acquisitions upon performing asset-liability matching.

Congratulations! You're now Froogled Up™ on what "Asset-Liability Matching" means!

Feel free to use it throughout your financial/insurance life.

Sincerely,

www.FroogleMe.com

user comments

thank you, come again!
Froogle 1.1.1.7

ASSET-LIABILITY MATCHING

EXAMPLE:

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