UK insurers recoupon interest rate swaps in bid to enhance yield

Stock market performance

UK insurers are renegotiating their in-the-money interest rate swaps to release cash to invest in higher-yielding assets and reduce the cost of servicing collateral, according to market participants.

Insurers holding fixed receiver swaps entered into when interest rates were high have seen the mark-to-market value of these positions rocket in recent years as rates have plummeted. At the same time, falling rates have reduced the yield insurers can achieve on the asset portfolio.

Shazia Azim, a pa

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: