Small reinsurers ‘shortening bond durations’ to protect against interest rate volatility

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Reinsurers are shortening the maturity of their asset portfolios to protect against the risk of volatile interest rates, analysts at Fitch Ratings say. Smaller firms, with invested assets of £10 billion or less, are limiting the maturity of new bond purchases to less than a year. The rating agency says such a strategy seeks to reduce the impact of suddenly rising interest rates on fixed-income books, while offering the flexibility to reinvest matured assets in higher yielding assets whe