A Profile of the Utilization of Futures and Options by the Insurance Industry

High and volatile rates and uncertainty of future inflation can, of course, have an important impact on the investment policies of the insurance industry. Large portions of assets are accounted for by bonds and mortgages. Fixed income securities are typically very sensitive to interest rate. This article is concerned with the application of financial futures, options on financial futures, stock index futures, options on stock index futures, and put and call options on common stock by the life and property-casualty insurance industries.