At the End of Q1, Insurance Companies’ Non-Performing Loan Ratio Rises by 0.1%p... "Guidance on Loan Loss Provisions and Asset Quality"

Loan Receivables Down 0.4%

Delinquency Rate at 0.82%, Down 0.02 Percentage Points

At the end of the first quarter, the non-performing loan (substandard and below loans) ratio of insurance companies surged. The financial supervisory authorities plan to instruct insurers to set aside loan loss provisions and strengthen asset quality management in preparation for a possible increase in bad loans due to the situation in the Middle East and other external risks.

The Financial Supervisory Service headquarters in Yeouido, Seoul. Financial Supervisory Service

According to the “Status of Insurance Company Loan Receivables as of the end of March 2026” announced by the Financial Supervisory Service on the 27th, the total balance of loan receivables at insurance companies stood at 264.1 trillion won, a decrease of 1.1 trillion won (0.4%) compared to the previous quarter.

The balance of household loans increased by 500 billion won (0.4%) to 134.5 trillion won, while corporate loans decreased by 1.7 trillion won (1.3%) to 129.5 trillion won.

At the end of the first quarter, the delinquency rate for loan receivables at insurance companies was 0.82%, down 0.02 percentage points from the previous quarter.

Among these, the delinquency rate for household loans rose by 0.03 percentage points to 0.87%, while the delinquency rate for corporate loans fell by 0.03 percentage points to 0.80%.

The non-performing loan ratio rose by 0.10 percentage points to 1.13%. This was the largest increase since the end of the first quarter last year, when it had jumped by 0.29 percentage points in a single quarter.

The non-performing loan ratio surged from 0.64% at the end of the fourth quarter of 2024 to 0.93% at the end of the first quarter last year, an increase of 0.29 percentage points. After that, it hovered around 1%, recording 1.00% at the end of the second quarter, 0.98% at the end of the third quarter, and 1.03% at the end of the fourth quarter last year. Then, at the end of the first quarter this year, it jumped again by 0.10 percentage points to 1.13%.

The non-performing loan ratio for household loans rose by 0.01 percentage points to 0.68%, and the ratio for corporate loans increased by 0.14 percentage points to 1.35%.

A Financial Supervisory Service official said, "In light of the continued external instability, including the Middle East situation, we plan to guide insurance companies to enhance their loss-absorbing capacity by accumulating sufficient loan loss provisions and to strengthen asset quality management to prepare for a possible increase in bad loans."

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