Adjusted Liabilities

It's an insurance industry term. Insurance companies are liable for the damages they cover. They have assets...usually invested in bonds and stocks. And there is a kind of minimum coverage ratio they must maintain for the assets they have relative to the total liabilities they might suffer if, in fact, that earthquake and pestilence that goes with it...all happen.

They have a maintenance reserve, i.e. a basic 'always having to pay' maintenance amount for regular claims that happen all the time; and then there's an asset reserve...like if they have to sell off assets to pay for Johnny's very poor car parking job that ended with the SUV in the pool.

Why do these ratios matter? Because they reflect how financially healthy an insurance company is. The numbers are used for both investors and, for some, marketing. That is, if you're buying some form of variable life insurance policy, which is likely not to trigger for 25 years when you drive your Ferrari into a wall...you want to be sure that your insurance company is around, so that your grandkids have at least something. A financially strong insurance company should give policy-buyers at least some comfort in The Long Cold Sleep coming.