Korean non-life and life industry stands steady in 2024 – Fitch Ratings

Insurers are seen to exhibit enhanced financial performance in the short term, mainly because of improvement in investment yield and focus on higher-value-added businesses.

Korean life and non-life insurance will maintain a neutral 2024, despite the impact of the new accounting standards IFRS17 and IFRS9, as well as the introduction of the new solvency regime, K-ICS, within a high-interest rate environment, forecasted by Fitch Ratings.

The expectation is that insurers will exhibit enhanced financial performance in the short term, primarily attributed to a gradual improvement in investment yield and a strategic focus on higher-value-added businesses. However, potential challenges may arise from increased inflationary pressures on claims and elevated reinsurance costs.

Given the significance of capital strength under the new capital regime, K-ICS, Fitch emphasises insurers' efforts to fortify their capital position, reshape business portfolios, and refine investment strategies.

ALSO READ: Korean Re to see growth potential in S.K.’s coinsurance business: AM Best

The adoption of value-added products, especially in the health sector, is anticipated to generate a higher Contractual Service Margin (CSM), crucial for insurers as it serves as a component of capital and is recognized as profit upon service fulfilment.

Fitch anticipates insurers will continue to underscore the importance of asset-liability management, extending the duration of their assets to align with liabilities. This strategic move aims to secure a more stable capital position in response to fluctuations in interest rates.

Also Read

Tysers appoints new leaders to enhance APAC operations

Tokio Marine Kiln appoints new marine leader for APAC

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit