South Korea Financial Supervisory Service reports insurers' K-ICS capital ratio at 212.3% with transitional measures and steps up focus on weak capital positions

The Financial Supervisory Service has published insurance companies' capital adequacy ratios under the Korean Insurance Capital Standard for December 2025, showing a modest quarter on quarter improvement overall. With transitional measures applied, the aggregate K-ICS ratio rose to 212.3% at end-December from 210.8% at end-September. Life insurers' ratio increased to 205.8% from 201.4%, while nonlife insurers' ratio fell to 221.9% from 224.1%. Without transitional measures, the aggregate K-ICS ratio increased to 197.6% from 196.8%. Available capital under K-ICS rose by KRW9.3 trillion to KRW284.0 trillion, while required capital increased by KRW3.5 trillion to KRW133.8 trillion. The increase in available capital reflected net earnings of KRW0.9 trillion and a KRW15.9 trillion expansion in accumulated other comprehensive income during October to December, linked to a stock market rally. Higher interest rates reduced disability and morbidity risk by KRW2.9 trillion and interest rate risk by KRW2.5 trillion, but equity risk increased by KRW9.3 trillion. Given increased financial market uncertainty tied to escalating Middle East tensions, the FSS said it will focus on ensuring insurers maintain sufficient capital buffers and will urge firms with weak capital positions to hold high quality capital and strengthen risk management.