As structural shifts replace globalisation with regionalisation, insurers are adapting strategic allocations through stricter risk management and shorter investment tenors.
Asian insurers are moving beyond tactical hedging, using derivatives to manage volatility, enhance capital efficiency, and strengthen portfolio construction.
The new Swap Connect, which will be launched in six months’ time, will provide one more hedging tool for offshore Chinese bondholders under the China-Hong Kong Bond Connect.
Neutral durations and infrastructure debt are part of strategies insurers have employed to manage headwinds such as regime changes and interest rate uncertainties.
Asset owners are increasingly looking to derivatives amid regulatory changes and a low-yield environment, with forwards and Swaps being the most popular choices.
From November, investors under China's Qualified Foreign Institutional Investor (QFII) scheme will be allowed to trade commodity futures, commodity options and stock index options.
The insurer's head of investment solutions explains why upcoming changes to rules for using derivatives led to it implement a new collateral reporting solution.
Larger life insurance firms are likely to pursue private asset investing more assertively. Some think that they could look to structured equity products that hedge risk too.
Paul Carrett says he supports the use of derivatives to hedge risks and execute promptly and hopes the new RBC regime doesn’t limit the investment opportunities available to insurers.
Underdeveloped derivatives markets in China may be holding back investor access to onshore bonds. Three specialists tell AsianInvestor what needs to be done.