Insurer risk capital ratio down in Q3
The risk capital ratio (RBC) of local insurance companies stood at 254.5% at the end of September, down 6.4 percentage points from three months earlier, according to data from the Financial Supervisory Service (FSS).
The drop came as rising market interest rates and declines in stock markets resulted in losses on their assets, according to the FSS.
The ratio has been trending downward since it stood at 283.6% at the end of September 2020.
The RBC ratio is derived from the actual solvency capital divided by the minimum solvency capital requirement. It measures the ability of an insurer to absorb losses and pay insurance money to policyholders.
Local insurers are required to keep the ratio at 100% or more, while the watchdog advises insurance companies to have ratios of 150% or more.
Insurance companies here are required to gradually increase their capital reserves to better cope with stricter global accounting standards for insurers, which are expected to take effect in 2022. (Yonhap)