Indian Insurers Boost State Bond Derivatives as Yields Climb

Indian insurers are turning to state government bonds for a popular derivatives trade, locking in higher yields amid record provincial debt supply.

ICICI Prudential Life Insurance Co., Axis Max Life Insurance Ltd. and Shriram Life Insurance Co. are among major insurers that entered bond forward contracts with banks since late January. Under these agreements, lenders commit to selling securities at a fixed price on a future date. While insurers have long used such instruments, they were typically linked to federal government notes.