Insurance Companies' Capital Adequacy Ratio Reaches 210.8% in Q3 Last Year, Up 4 Percentage Points from Previous Quarter

Life insurers at 201.4%, up 0.5 percentage points from previous quarter
Non-life insurers at 224.1%, up 9.5 percentage points from previous quarter

The insurance companies' capital adequacy ratio (K-ICS, also known as KICS) increased compared to the previous quarter.

According to the "Status of Insurance Companies' KICS as of the end of September 2025" released by the Financial Supervisory Service on January 6, the KICS for insurance companies stood at 210.8%, up by 4 percentage points from the previous quarter's 206.8%. During the same period, the KICS for life insurance companies rose by 0.5 percentage points to 201.4%, while the KICS for non-life insurance companies surged by 9.5 percentage points to 224.1%.

KICS, introduced in 2023 under the International Financial Reporting Standards (IFRS 17) framework, is a key indicator of financial soundness, calculated by dividing available capital by required capital. The recent increase in insurance companies' KICS was attributed to a greater rise in available capital compared to required capital.

As of the end of September last year, insurance companies' available capital stood at 274.7 trillion won, an increase of 14.1 trillion won from the previous quarter. This was due to increases in net profit, stock prices, accumulated other comprehensive income, and contractual service margin (CSM).

The required capital for insurance companies reached 140.3 trillion won, up by 4.3 trillion won from the previous quarter. This was the result of an increase in equity risk due to rising stock prices, which was offset by a decrease in interest rate risk as the duration gap narrowed.

An official from the Financial Supervisory Service stated, "With recent sharp increases in interest rates and heightened interest rate volatility, it is necessary to continue asset-liability management (ALM) efforts to minimize the impact of interest rate fluctuations. In addition, as a deterioration in loss ratios can lead to an increase in insurance liabilities, efforts to strengthen loss ratio management are also needed."