Insurers Eye Derivatives For Credit Risk

Credit derivatives, once relegated to the fringes of the financial world, have exploded in use over the last two years. Banks are currently the biggest users of these products. Insurers and reinsurers, however, as the largest holders of credit risk, are increasingly using credit derivatives as an investment and risk management tool.

Market participants feel that over the next few years, the insurance industry will become the largest end-user of credit derivatives.

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