Seoul: The capital adequacy ratio of insurance companies in South Korea experienced an increase in the first quarter of the year compared to the previous quarter, primarily due to a rise in available capital, data revealed on Friday. The Financial Supervisory Service reported that the average capital adequacy ratio of domestic insurance firms reached 216.1 percent as of the end of March, rising from 212.3 percent three months earlier.
According to Yonhap News Agency, the capital adequacy ratio is a measure of available capital compared with required funds under the Korean Insurance Capital Standard (K-ICS). The increase observed in the January-March period was attributed to a rise in both available and required capital following enhanced earnings and gains in stock holdings.
Available capital under K-ICS saw an increase of 26.9 trillion won (US$17.6 billion) on a quarterly basis in the first quarter, while required capital grew by 10.1 trillion won during the same period, as reported by the financial watchdog. Specifically, the average capital adequacy ratio of life insurers rose to 207.7 percent as of the end of March, up 1.8 percentage points from three months earlier. Meanwhile, nonlife insurance companies saw a 7.8 percentage point increase, bringing their ratio to 229.7 percent over the cited period.