Long‐Term Economic and Market Trends and Their Implications for Asset/Liability Management of Insurance Companies

Assumptions regarding long‐term expected returns have significant implications for asset/liability management of financial institutions. This article questions the validity of common assumptions regarding long‐term expected returns that are employed by financial institutions, in particular insurance companies. Although this article directly addresses this issue in the context of the insurance industry, the discussion is relevant for all institutional investors in fixed income markets.