New capital rules pressure South Korean insurers

Standardised actuarial assumptions may affect firms differently based on underwriting practices.

Fitch Ratings expects the capital position and profitability of South Korean insurers to stabilise as higher interest rates ease pressure on solvency and improve investment yields.

The ratings agency said rising interest rates should reduce pressure from lower liability discount rates, although insurers could still record short-term unrealised investment losses.

Fitch noted that the sector's Korean Insurance Capital Standard (K-ICS) ratio improved in 2025. Whilst net income fell during the year, earnings partially recovered in the first quarter of 2026.

The agency also said upcoming regulatory changes, including standardised actuarial assumptions and a minimum core capital requirement, could put additional pressure on some insurers. 

However, it expects capital buffers across the sector to remain adequate, with the impact varying depending on individual insurers' underwriting practices and actuarial assumptions.