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Insurers' risk-based capital ratio rises in Q2

All News 12:00 October 04, 2020

SEOUL, Oct. 4 (Yonhap) -- Insurance firms in South Korea saw their risk-based capital ratio increase in the second quarter of this year, data showed Sunday.

The risk-based capital (RBC) ratio -- the actual solvency capital divided by the minimum solvency capital required -- of insurance firms stood at 277.2 percent at the end of June, up 10 percentage points from three months earlier, according to the data from the Financial Supervisory Service (FSS).

The RBC is required to be above the regulatory standard of 100 percent, the FSS said.

Insurers' risk-based capital ratio rises in Q2 - 1

The FSS said it will encourage insurance companies to preemptively improve their financial stability by expanding capital and strengthening the crisis situation analysis in case there are concerns over the falling RBC ratio.

Insurance firms in South Korea are required to gradually increase their capital reserves to better cope with tougher global accounting standards for insurers.

Under the new rules, set to take effect in 2022, insurers' liabilities will be assessed on the basis of their market value rather than book value.

The new rules are aimed at enabling a fairer assessment of insurers' ability to withstand stress and to have a larger capital base and reserves to cover potential losses.

entropy@yna.co.kr
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