With Solvency II, life insurers are finding the asset-liability matching requirements for unit-linked portfolios to be more important. The Solvency II regulation has created an opportunity for life insurers to enhance the capital position of unit-linked portfolios while simultaneously stabilising balance sheets. But these benefits come at a price. Insurers will have to determine whether the capital savings are enough to offset the operational complexities and a more volatile solvency coverage ratio.