Insurance firms look to time their volatility hedging
Market volatility is at its lowest level since the financial crisis – but should insurers be preparing for the inevitable return to a more volatile environment? Blake Evans-Pritchard reports
The Chicago Board Options Exchange Market’s Volatility Index (Vix), which tracks expected market volatility on the S&P 500, suggests that stock swings have been particularly low over the past 12 months (see graph). At the end of May, the index was registering an expected movement in the S&P index over the ensuing 30-day period of 11%, its lowest level since March the previous year. The VStoxx, a measure of implied volatility based on the Euro Stoxx 50, tells a similar story.
This is a dramatic
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