All Insurance Companies Exceeded Recommended RBC Ratio (150%)

by Oh Hyungil

Published 31 Dec.2020 06:00(KST)

RBC Ratio of Insurance Companies at the End of September 283.9%

RBC Ratio of Insurance Companies at the End of September (Source: Financial Supervisory Service)

[Asia Economy Reporter Oh Hyung-gil] The Risk-Based Capital (RBC) ratio, an indicator representing the financial soundness of all insurance companies, has exceeded the regulatory authority's recommended level.

As of the end of September, the RBC ratio of insurance companies announced by the Financial Supervisory Service on the 31st was 283.9%, up 7.5 percentage points from 276.4% at the end of June.

The RBC ratio is calculated by dividing available capital by required capital and is an indicator used to measure the financial soundness of insurance companies. The Insurance Business Act mandates maintaining it above 100%, and the Financial Supervisory Service recommends maintaining it above 150%.

Available capital increased by 9.1 trillion KRW. Insurance companies recorded a net income of 1.8 trillion KRW and expanded capital by 700 billion KRW through the issuance of new capital securities. Additionally, other comprehensive income, such as valuation gains on available-for-sale securities due to stock price increases, rose by 3.9 trillion KRW.

Required capital increased by 1.6 trillion KRW due to increases in credit and market risk amounts following the growth of managed assets.

Among life insurance companies, Kyobo Lifeplanet had the highest RBC ratio at 781.3%, followed by Prudential Life (486.4%), Orange Life (412.6%), and Cardif Life (406.0%). On the other hand, IBK Pension Insurance recorded the lowest at 171.8%.

Among non-life insurance companies, Seoul Guarantee Insurance had 414.9%, AIG Non-Life Insurance 408.3%, and Samsung Fire & Marine Insurance 319.3%. Lotte Non-Life Insurance had the lowest at 169.4%.

Previously, Hana Non-Life Insurance, which recorded an RBC ratio of 115.7% at the end of June, recorded 252.3%, resulting in all insurance companies exceeding the RBC ratio of 150%.