Volatility knocks
The turbulence in global equity markets has caused sizeable losses for insurance companies that have delta-hedged variable annuity exposures. Are insurers considering other options? Peter Madigan reports
The credit crisis has morphed in the past three months from a calamity largely affecting financial institutions with subprime mortgage exposures to a widespread phenomenon involving equities, commodities and foreign exchange rates. In this latest phase, the ripple effects have spread far beyond banks and hedge funds, and are starting to hit the insurance sector.
Having navigated the early part of the crisis relatively unscathed, insurance companies are starting to feel the pressure caused by
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