Negative long-term US inflation outlook means hedging currently underpriced for insurers and pension funds

Current US economic data is masking the cheapness of inflation hedging


Capital markets are underestimating structural changes that will drive US inflation rates upwards, meaning now is a good time for insurers and pension funds to hedge their inflation risk cheaply, according to Tim Drayson, economist at Legal & General Investment Managers.

Despite recent weak economic data implying a positive outlook for US inflation, Drayson outlined several factors pointing to a long-term scenario that was the opposite of these expectations. His five main areas of concern are

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The future of life insurance

As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…

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