LIC's $1B bet on interest rates shows it's serious about risk
LIC, India's biggest insurer, is now working closely with Wall Street giants like JPMorgan and Bank of America to protect itself from interest rate swings.
In just two months, LIC signed $1 billion in forward rate agreements (FRAs)—a big step for an organization that only entered this market in November 2024.
Eliminating the impact of fluctuating interest rates
By using FRAs, LIC can lock in future bond prices and keep its earnings steady even if interest rates drop.
Since May, nearly 40% of all FRA trades in India have come from LIC—showing they're serious about smart risk management.
LIC's actions are increasing the demand for government bonds
LIC's moves are driving up demand for long-term government bonds.
Recent auctions have hit record highs for bids, hinting at a more active and sophisticated Indian bond market thanks to these new strategies.
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