KDB Life grapples with high leverage, Fitch reports

The insurer’s CSM increased in 2023, reflecting a focus on profitable policies.

The sour outlook by Fitch Ratings reflects KDB Life's tightened capital buffer and high financial leverage, alongside uncertainty surrounding potential ownership changes.

Capitalisation fell below 'adequate' levels at end-2023, primarily due to reduced shareholders' capital and regulatory actuarial assumption changes. The financial leverage ratio remained high at 51% at end-2023.

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KDB Life increased allocation to alternative investments but may shift to lower-risk assets. Despite challenges, KDB Life's new business contractual service margin (CSM) increased in 2023, reflecting a focus on profitable policies. Net income was KRW 23.9 billion.

Overall, KDB Life is positioned as a mid-sized life insurer in South Korea, with a moderately diversified portfolio and business risk profile.