ALM = Asset and Liability Management

It is a way of managing the financial risks that arise from the mismatch between the assets and liabilities of an insurance company. 

ALM involves balancing the cash flows, returns, and risks of the assets and liabilities, as well as complying with the regulatory and capital requirements. 

ALM is specially important for any organisation that has a significant potential mismatch between in its assets and liabilities, such as banks, pension funds, insurances, … 

ALM can help the financial institution to achieve greater efficiency, risk-adjusted profitability, and solvency in the short, medium, and long term.