The role of credit risk insurers in the significant risk transfer (SRT) market is continuing to expand, according to the International Association of Credit Portfolio Managers (IACPM).
In 2025, insurers signed up to cover the risk of default on €4.7bn in synthetic risk transfers, up from €2.7bn in 2024.
Between 2019 and 2025, banks moved €10.9bn of credit risk to insurers through SRTs.
Asset classes covered by insured SRTs include business finance, large corporate loans, residential mortgages, project finance, commercial mortgages and trade finance.
Insurers have the advantage that they can cover these risks on an “unfunded” basis, meaning that, unlike hedge funds, they are not required to set aside money to cover losses.
Whereas hedge funds and other investors typically deposit collateral in an account for the duration of an SRT deal, insurers can rely on their credit ratings and existing balance sheets to manage these risks.
