Korea’s insurers benefit from regulatory changes easing investment rules

Insurers are likely to focus on asset-liability management. 

Korea’s insurers are expected to stay on stable ground as solvency ratios strengthen and regulators ease investment rules, according to CreditSights.

By end-June 2025, the sector’s K-ICS solvency ratio rose to 206.8% with transitional measures, up 8.9 percentage points from the prior quarter. 

Life insurers stood at 200.9% and non-life at 214.7%. Without transitionals, the sector ratio was 192.1%, still well above the 130% minimum.

The improvement came from a $8.1b (KRW11.3t) boost in available capital, driven by higher earnings and new bond issuances, whilst required capital rose only slightly. 

Regulators have also introduced measures to lower risk charges and expand incentives for long-term asset-liability matching, which could give insurers more scope to invest in higher-yielding assets.

With rates expected to stay low, insurers are likely to focus on asset-liability management. 

Hanwha Life, for example, is prioritising longer-duration bonds to limit rate sensitivity, whilst the industry continues discussions on liability discount rate rules.