Exchanges woo insurers with futures alternative to OTC swaps

With the price of over-the-counter swaps predicted to increase as new derivatives rules take effect, futures are being touted as an efficient alternative hedging tool, but are they a perfect fit? Blake Evans-Pritchard reports

With derivatives set to become more expensive as new legislations begin to bite, insurers are looking at how they might be able to adjust their hedging strategies in order to bring costs down while still maintaining a good match for their liabilities. Swap futures have emerged as a possible solution, but a certain amount of scepticism remains as to whether they can actually provide the accurate match for long-dated liabilities that insurers need.

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