Reuters: James Forbes-King Comments On Life Insurers And LDIs

With the focus of a gilt market storm being around pension schemes' use of liability-driven investments (LDIs), many of which are highly leveraged, James Forbes-King from our Insurance and Asset Management practice, commented in a Reuters explainer on recent developments: "The Prudential Regulation Authority has worked with insurers and upgraded the life insurers' liquidity risk management capabilities in the past few years; for example, they have put in place more rigorous liquidity stress testing that you don't see in the pensions market."

The article highlights that life insurers have a stronger buffer, as they secured more their positions with physical financial instruments and not with derivatives. 

Read the article here.