Insurers' capital adequacy ratio down in Q4

Financial Supervisory Service / Yonhap

The capital adequacy ratio of insurance companies in Korea fell from three months earlier in the fourth quarter of 2024, data showed Thursday.

The average capital adequacy ratio of domestic insurance firms had come to 206.7 percent as of end-December, down from 218.3 percent three months earlier, according to the data from the Financial Supervisory Service.

The ratio refers to the amount of available capital compared with required funds under the Korean Insurance Capital Standard (K-ICS).

The decrease in the October-December period was partly attributed to a fall in available capital following dividend payouts and insurance-related debts, and a rise in required capital due to growing sales of insurance plans.

Available capital under K-ICS fell 10.8 trillion won ($7.87 billion) on-quarter in the fourth quarter of last year, while required capital increased 1.4 trillion won over the cited period, according to the financial watchdog.

The average capital adequacy ratio of life insurers stood at 203.4 percent as of end-December, down 8.3 percentage points from three months earlier, while that of nonlife insurance companies slipped 16 percentage points to 211 percent over the cited period, according to the data.