Natasha de Teran looks at the explosion in demand for capital guaranteed products as pension and insurance fund managers seek to stem losses.
Insurance’s appeal tends to rise exactly in line with the risk or experience of loss. Unsurprising then, that in the aftermath of one of the most volatile periods in recent financial history, investors have increasingly been seeking out forms of insurance. The result has been that derivatives volumes have spiked across the board, as investors have sought to directly hedge their exposures or to buy into pre-packaged forms of insurance.
