Insurers gear up for new derivatives clearing rules

Derivatives costs are set to rise on the back of new collateral management rules. Blake Evans-Pritchard looks at how life insurers are preparing

arrows and path

Derivatives are vital to the life insurance industry. They allow appropriate mitigation of risk through carefully designed hedging structures, and aid the development of the kinds of complex products that consumers increasingly demand. But new rules on collateral may make them more expensive, and life insurers are starting to wonder what this could mean for their business.

At the heart of this issue is a push by the world’s 20 largest economies (G-20) to impose mandatory central clearing of

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