Q2 Insurers' RBC Ratio at 277%... Up 10%p from Previous Quarter

[Asia Economy Reporter Kim Hyo-jin] As of the end of June, the Risk-Based Capital (RBC) ratio of insurance companies stood at 277.2%, up 10 percentage points from 267.2% at the end of the previous quarter, the Financial Supervisory Service (FSS) announced on the 4th.

The RBC ratio is calculated by dividing available capital by required capital and serves as an indicator to measure the financial soundness of insurance companies. The Insurance Business Act mandates that the RBC ratio must exceed 100%. The FSS recommends a threshold of 150%.

Financial Supervisory Service

Available capital increased by 11.4 trillion KRW due to factors such as a rise in other comprehensive income (6.5 trillion KRW) from stock price recovery and market interest rate decline, and the realization of net income (2.3 trillion KRW).

Required capital rose by 2.1 trillion KRW, driven by increases in credit and market risk amounts reflecting additional recognition of retirement pension risks and growth in operating assets (1.5 trillion KRW).

The RBC ratio for life insurance companies at the end of June rose 11.4 percentage points to 292.6%, while non-life insurance companies saw a 7 percentage point increase to 248.6%.

Among life insurers, the largest decline in RBC ratio was at Fubon Hyundai (14.8 percentage points). Kyobo Life's RBC ratio increased by 443.6 percentage points. Hana Non-Life Insurance recorded an RBC ratio of 122%, the only company below the FSS recommended level.

An FSS official stated, "If concerns arise over vulnerabilities in RBC ratios in the future, we will strengthen crisis situation analysis and proactively enhance financial soundness through capital expansion and other measures."

This content was produced with the assistance of AI translation services.