Insurers Seek Larger Role in Bank Significant Risk Transfer Market Amid Rising Demand

Insurers are aiming to increase their participation in the market for significant risk transfers (SRTs) this year, as banks are stepping up their use of these hedging instruments. Firms anticipate a 50% increase in SRT participation compared to 2025, with the strongest growth expected in corporate loans and asset-based finance. The Bank of England has expressed concerns that such deals could expose banks to greater risks during periods of stress if insurers are unable to honor their guarantees.