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Insurance Solutions

Strategic asset allocation solution for insurers and asset managers

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Overview

Liability-aware strategic asset allocation

Strategic asset allocation is now a primary driver of enterprise value and has become materially more complex for life insurers and asset managers. The shift from rules-based to principles-based regulatory frameworks creates an iterative process between investment and ALM teams. Growth in private and structured assets, and heightened capital and liquidity scrutiny require insurers to evaluate investment decisions through a total balance sheet lens.

Milliman advises insurers and asset managers on SAA with actionable balance sheet analytics that reflect the true interaction among assets, liabilities, and capital requirements. Evolve your SAA from an investment exercise into a capital optimization analysis.

Our differentiators

Actuarial depth. Balance sheet focus. Independent advice.

We deliver actionable, tailored SAA analytics powered by deep expertise and robust modeling systems so you can focus on strategic decisions without the operational complexity. We:

  • Provide a total balance sheet view of risk-return trade-offs
  • Evaluate SAA decisions through a multi-lens, efficient frontier focused on distributable earnings
  • Support risk and liquidity analysis across economic, credit, and behavioral scenarios
  • Provide independent advice, separate from asset management products and platforms
How we help

Enhance enterprise value with liability-aware SAA

Life insurer solutions

Approach strategic asset allocation holistically with an integrated ALM framework. Our services help insurers:

  • Confidently make informed investment decisions with reliable SAA analytics derived from a single source of truth maintained by a highly coherent ALM system
  • Evaluate risk-return trade-offs under multiple lens and risk frameworks, enabled by repeatable and scalable technology
  • Assess the non-linear risks of complex assets from first principles
  • Embed hedging strategies as a core SAA co-optimization element
  • Support competitive and sustainable product pricing

Asset manager solutions

Asset managers are increasingly expected to demonstrate how their strategies perform within an insurer’s balance sheet. Milliman provides:

  • Insight into how SAA affects insurers’ key performance metrics, such as distributable earnings
  • Optimization of risk-adjusted return on regulatory capital
  • Liability-aware, stochastic evaluation of asset classes and portfolio structures
  • Support for strategy differentiation and mandate expansion
  • A shared analytical framework that enhances communication and relationships with insurance clients
Data visualization and analytics

Interactive total balance sheet insight

Our interactive analytics portal translates complex ALM and SAA modeling into intuitive dashboards aligned to value and risk measures. Users can compare candidate portfolios, evaluate risk-return trade-offs, assess stress and liquidity impacts, and monitor asset-liability alignment in one integrated view. The results are faster insight, clearer communication, and more confident strategic decisions.

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Robust and scalable modeling technology

Streamlined SAA workflow powered by Milliman’s world-class asset and liability modeling engines

Our highly coherent, cloud-based technology ecosystem maintains a single source of truth throughout the SAA optimization to deliver repeatable and scalable analytics. You get:

  • First principle modeling of assets and liability cash flows and risk metrics
  • Native integration with third-party analytics to model complex assets at scale
  • Sophisticated hedge strategies, reinvestment strategies, and disinvestment strategies for holistic SAA optimization
  • Scenario generation capabilities supporting real-world, economic, and regulatory analysis
  • Flexibility to integrate your existing platforms with our open architecture
Learn more about our solutionDownload
Insight

Strategic asset allocation insight

Article

Complex assets in insurance and annuity industries

Structured credit is no longer a niche allocation for life insurers — it’s becoming core to SAA strategy.

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Report

Asset allocations and investment strategies of U.S. life insurers in an inflationary interest rate environment

Since 2020, rising inflation and increasing Treasury rates—now at their highest levels since before the 2008 recession—have prompted insurers to adjust their asset allocations, taking advantage of improved yields from safer private and fixed-income asset classes.

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White paper

Enhancing SAA outcomes with derivatives: Insights from a RILA case study

We examine three different portfolios within a block of registered index-linked annuities to show how derivatives can enhance outcomes with strategic asset allocation.

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White Paper

VM-22 hedging strategies: Risk management and ALM for fixed index annuities

As VM-22 takes effect in January 2026, thoughtful evaluation of hedging strategies can allow insurers to unlock value and better manage risk.

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White Paper

Prepayment risk in a VM-22 world: Structural dynamics, scenario behavior, and portfolio implications for life insurers

We consider an insurer's $1 billion investment portfolio to show how the mechanics of prepayment behavior manifest under Virtual Manual (VM)-22.

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White paper

Bridging the private-credit modeling gap: A nearest-neighbor approach for insurers

As insurers boost their private credit allocations, we propose a method for projecting cash flows without bespoke modeling.

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Article

7 considerations for pricing annuities in a VM-22 PBR world

We discuss seven important considerations as insurers adapt their pricing models and philosophy in the new world of principle-based reserving.

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Strategic asset allocation FAQ

Unpacking the complexities of strategic asset allocation (SAA) for life insurers and asset managers

Why does SAA look different today?


Principles-based regimes mean asset portfolios directly affect liability valuation and capital requirements. Growth in private and structured assets increases complexity around credit risk, cash flows, and liquidity, requiring a full balance sheet perspective.

Why are traditional asset-only approaches no longer sufficient?

Asset return and volatility alone do not capture interactions with liability dynamics, capital impacts, or insurer value measures. Integrated analytics across assets, liabilities, and capital support robust optimization.

How can asset managers benefit from liability-aware SAA analytics?

Liability-aware analytics show how SAA affects insurer value measures, such as distributable profits, improving alignment, communication, and competitive positioning.

How does Milliman differentiate its SAA services?

Milliman combines actuarial and ALM expertise with customizable analytics that evaluate allocations in the context of liabilities and capital, enabled by robust and scalable modeling technology and reflecting the perspective of an independent actuarial and risk consulting firm.

How do principles-based frameworks affect asset allocation decisions?

Asset mix decisions now influence reserves, capital requirements, and financial outcomes. Sound asset-liability management (ALM) practices are rewarded, while cash flow and liquidity mismatches are penalized. Asset allocations must be evaluated through a total balance sheet lens rather than asset-only metrics.

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