“Insurance Companies’ Solvency Ratios Worsen in Q2 Due to Decline in Market Interest Rates”

K-ICS Ratio Life Insurance 212.6% · Non-Life Insurance 223.9%,
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Seoul Yeouido Financial Supervisory Service
[Yonhap News Materials Photo],
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, ‘ (Seoul=Yonhap News) Reporter Chae Sae-rom = Due to the increase in insurance liabilities following the decline in market interest rates, insurers’ capital adequacy ratio worsened at the end of the second quarter this year. ‘,
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, ‘ On the 17th, according to the Financial Supervisory Service, the K-Insurance Capital Standard (K-ICS) ratio at the end of June, adjusted with transition measures, was 217.3%, a decrease of 6.3 percentage points compared to the previous quarter (223.6%). ‘,
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, ‘ The ratio for life insurance was 212.6%, down 10.3 percentage points from the previous quarter, while non-life insurance increased by 0.8 percentage points to 223.9%.’,
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, ‘ The capital adequacy ratio is the value obtained by dividing the available capital by the required capital. The ratio dropped as the available capital of insurers decreased while the required capital increased.’,
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, ‘ At the end of June, the K-ICS available capital, after transition measures, decreased by 1.8 trillion won compared to the previous quarter to 260.4 trillion won, while the required capital increased by 2.6 trillion won to 119.8 trillion won.’,
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, ‘ The decrease in available capital was due to an increase in net profit in the second quarter, but the fall in market interest rates led to an increase in insurance liabilities, and the accumulated other comprehensive income decreased by 11.9 trillion won.’,
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, ‘ The increase in required capital was due to the rise in life and long-term insurance risks following the expansion of health insurance sales and the rise in market risks due to the increased interest rate risk from falling market interest rates.’,
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, ‘ The Financial Supervisory Service stated, “As the uncertainty in the financial market continues to increase, we will thoroughly supervise to ensure that vulnerable insurers secure sufficient capital adequacy.”,
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, ‘ Looking at the K-ICS ratios at the end of the second quarter, among life insurers, NongHyup Life had 373.4%, MetLife Life had 358.9%, and Lina Life exceeded 300% with 342.9%. ‘,
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, ‘ Among non-life insurers, Kakao Pay Non-Life Insurance had 1,171.9%, Shinhan EZ Non-Life Insurance had 343.5%, and NongHyup Non-Life Insurance exceeded 300% with 306.6%. ‘,
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, ‘ srchae@yna.co.kr’,
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