Recommendations for Improving Performance in Romanian Insurance Companies Regarding the Risk Management

In response to fundamental changes in regulation and technology, the financial industry around the world is undergoing an unprecedented wave of consolidation. From a risk and return standpoint, a strategy that is benchmark-unaware may be more successful than one that is designed to control portfolio risk versus a cap-weighted benchmark. The paper investigates the ALM model as well as its benefits and suggestions for the insurers. Employing a quantitative, low turnover approach to a portfolio of stocks selected for their low beta can lead to a more predictable return stream over time with lower overall volatility and less sensitivity to market movements.