Archive · 28 Jul 2025
India's LIC Uses Wall Street to Hedge Financial Risk
India's largest insurance company, LIC, is now using Wall Street banks to protect its money.
They're making deals called forward rate agreements (FRAs) to lock in how much money they'll get from bonds in the future.
This is like insurance for their investments, helping them avoid losing money if interest rates change.
LIC has already made $1 billion worth of these deals, which is a big part of the overall market.
These actions show that Indian financial companies are getting more sophisticated, and it helps make sure their money stays safe.
Life Insurance Corp. of India (LIC) is working with Wall Street banks to hedge liabilities.
LIC has entered $1 billion in bond forward rate agreements (FRAs) with banks like JPMorgan Chase & Co. and Bank of America Corp.
LIC's recent FRA deals account for 38% of the $2.6 billion in total FRA volumes since May.
FRAs help insurers lock in future bond yields and shield against falling interest rates.
LIC's activity has increased demand for long-term bonds, leading to high bid-to-cover ratios.
- Who
- Life Insurance Corp. of India (LIC).
- What
- Life Insurance Corp. of India (LIC) is hedging its liabilities using forward rate agreements (FRAs) with Wall Street banks.
- When
- Over the past two months, LIC has been increasing its activity.
- Where
- The deals involve banks like JPMorgan Chase & Co. and Bank of America Corp.
- Why
- To lock in future bond yields and protect against falling interest rates.
- Company
- Life Insurance Corp. of India (LIC)
- Banks Involved
- JPMorgan Chase & Co., Bank of America Corp.
- Type of Agreement
- Bond Forward Rate Agreements (FRAs)
- FRA Value
- $1 billion
- FRA Volume Share
- 38% of $2.6 billion since May
- LIC Assets
- $630 billion