Department of statistics and actuarial science, university of waterloo. Alm can be de ned as managing a nancial institution so as to earn an adequate return on funds invested, and to maintain a comfortable surplus of assets beyond liabilities (from quantitative. Alm is the practice of managing a business so that decisions and actions taken with respect to assets and liabilities are coordinated. It can be de ned as the ongoing process of formulat- ing, implementing, monitoring and revising strategies related to assets and liabilities to achieve an organization"s nancial objectives, given the organization"s risk tolerances and other constraints. Alm is relevant to, and critical for, the sound management of the nances of any organization that invests to meet its future cash ows needs and capital requirements. (from soa"s professional. Was initially developed to deal with interest rate risk, which became a major concern in the 1970"s, when rates increased substantially and became quite volatile.