Insurance Companies' K-ICS Ratio Improves to 216.1% at End of March... Both Life and Non-Life Insurers Rise

Up 3.8 Percentage Points from Previous Quarter

Life Insurers at 207.7%, Non-life Insurers at 229.7%

Available Capital Increases by 26.9 Trillion Won

The insurance companies' ability to pay claims improved in the first quarter compared to the previous quarter. Financial supervisory authorities stated that they plan to closely monitor insurers with vulnerable capital structures.

According to the "Status of Insurance Companies' New Risk-Based Capital Ratio (K-ICS) as of the end of March 2026" released by the Financial Supervisory Service on the 19th, the K-ICS ratio for insurers, applying transitional measures, stood at 216.1%, up 3.8 percentage points from the previous quarter's 212.3%.

The K-ICS ratio for life insurance companies rose by 1.8 percentage points to 207.7% compared to the previous quarter, while that of non-life insurers increased by 7.8 percentage points to 229.7%.

The K-ICS ratio is a soundness indicator that shows an insurer's claim-paying ability. It is calculated by dividing available capital by required capital. Available capital refers to the amount of capital held by the insurer, such as paid-in capital and retained earnings. Required capital is the capital amount that an insurer must hold to pay claims to policyholders.

The Financial Supervisory Service recommends that insurers maintain a K-ICS ratio of at least 130%. If the K-ICS ratio falls below 100%, prompt corrective actions such as management improvement recommendations, requirements, or orders may be imposed.

The reason for the increase in the K-ICS ratio among insurers is that the increase in available capital was greater than the increase in required capital. As of the end of March, available capital under K-ICS stood at 310.9 trillion won, up 9.5% (26.9 trillion won) from the previous quarter. During the same period, required capital increased by 7.5% (10.1 trillion won) to 143.9 trillion won.

The increase in available capital was mainly due to 4.5 trillion won in net income for the period and a 18.9 trillion won rise in accumulated other comprehensive income from stock price gains.

The main factor for the increase in required capital was a 12.4 trillion won rise in equity risk due to higher stock prices. However, the increase in required capital was tempered by a 3.4 trillion won decrease in insurance risk (disability and morbidity risk) stemming from rising interest rates.

Looking at the change in K-ICS ratios by sector, among life insurers, Chubb Life saw the largest increase compared to the previous quarter, rising by 29.5 percentage points to 233.7%. Over the same period, Fubon Hyundai Life registered the largest drop among life insurers, falling by 52 percentage points to 200.1%.

For non-life insurers, excluding Habit Factory, which jumped 513.2 percentage points from the previous quarter, NH Nonghyup Property & Casualty Insurance and Mitsui Sumitomo Insurance recorded the largest increases at 19 percentage points each, reaching 189.6% and 505.2%, respectively. The non-life insurer with the largest decrease was MyBrown, which dropped 424.5 percentage points to 513.8%.

A Financial Supervisory Service official said, "As uncertainty persists in the financial markets, we will focus our supervisory capacity on ensuring that insurers secure sufficient solvency. In particular, we plan to closely monitor insurers with weak capital structures to enhance the quality of their capital and strengthen risk management."

This content was produced with the assistance of AI translation services.