Asset and liability management (ALM) has become increasingly complex in Asia, especially in the wake of post-COVID-19 economic volatility. The move of Asian markets toward more sophisticated solvency frameworks and new accounting standards has led to stronger interactions between assets and liabilities.

To gain deeper insight into how companies are managing ALM in light of these recent developments, we have conducted a survey of life insurers in selected markets in Asia to examine their ALM frameworks and practices. This report summarises the results of the 2025 questionnaire exploring ALM practices at life insurance companies in major Asian markets: Singapore, Hong Kong, Japan, Mainland China, and South Korea. With input from 34 insurers, the survey offers a detailed view of ALM objectives, methodologies, constraints, integration with business functions, and current challenges.

Key findings

• Asian life insurers’ top priorities in ALM are meeting policyholder expectations, aligning asset and liability cash flows, and optimising risk-adjusted return and value.
• Optimisation approaches vary, with the efficient frontier method being the most popular overall, while single-metric optimisation is typically more favoured in South Korea and Singapore.
• The basis for ALM optimisation typically blends regulatory and economic measures, with regional companies preferring to follow local regulatory capital requirements.
• The most commonly cited constraint is solvency position and its sensitivity.
• Most commonly, insurers directly adopt a static strategic asset allocation (SAA), while some set flexible ranges for tactical asset allocation (TAA) or employ dynamic asset allocation processes that allow for ongoing adjustments.
• The majority of respondents conduct ALM strategy reviews annually, though insurers in Hong Kong and Mainland China may review more frequently.
• While most insurers only partially consider ALM factors in product development, interest rate sensitivity and cash flow matching metrics are prioritized.
• Hedging is widely recognised as a core ALM tool.
• For participating products, ALM strategies are mainly driven by policyholder factors, such as benefit guarantees and profit participation features.
• Insurers face several common challenges, including increased complexity from evolving regulatory frameworks, volatile interest rates, limited availability of long-duration assets, and competitive pressures in product offerings.