The [financial newspaper gimmingyeong Korea News] introduced ahead of the 2021 IFRS17 (new international accounting standards) insurance industry is an emergency. Jyeotgi established in recent years because the International Accounting Standards Board (IASB) to IFRS meeting finalized the first half of this year.
According to the Korea Accounting Standards The IASB has won the last two tasks for the current season IFRS17 draft. We've completed the practical application tests with a major insurer of last year reportedly being address the issues identified in detail at this stage.
The accounting of the insurance capital and reduced debt significantly increased when IFRS17 introduced. Market evaluation methods of debt, ie claims payable is due to change in market at current cost. Insurers have to join at the time interest rates as granular as a kind of contract service margin, risk-adjusted discount rate taking into account the time value of money, predict future cash flow expected cash flow of future cash flows, including four classifications of calculating the liabilities Future income we have to reflect the liability calculations and so can only increase the insurance burden.
Also accelerated pace of monetary authorities. FSS naenwatda Enforcement Regulations for the Supervision of Insurance Business amendments to strengthen the RBC (solvency ratio) of Regulation phased implementation insurers to keep pace with IFRS17. The gist of it is that stricter regulations that extend the debt ceiling limit as far as 20 to 30 years to reflect the real value of insurance liabilities.
As a result, the insurance industry expects to fall about 100% p RBC ratio of most insurers. The first half of last year based on the average RBC ratio is expected to be close to 269.1% Non-life insurers, life insurers based on 150% of FSS cases Recommendation 100% p decline to 297.1% as expected. Some insurance companies are short of the average RBC ratio is a situation that can even be targeted corrective action.
RBC Insurance ◇ crash crisis strengthened prudential regulation
As one by one the original notice Regulatory Strengthening the reality which was expected to grow even further recapitalization burden on insurers.
First, the recapitalization bigger burden on insurance contracts (insurance payable). The duration longest maturity of insurance liabilities will increase to 30 years from 20 years. Finally to avoid interest rate risk insurers must go to investing in long-term assets to match liabilities and assets than the previous duration.
Risk is also strengthening the regulation of variable life insurance. In the case of variable life insurance with a guaranteed minimum amount calculated risk guarantee scheme should be calculated to reflect different scenarios.
Risk measurement range of special retirement accounts are also some adjustments, such as adding a calculated amount of credit and market risks in addition to current operational risk solution. Insurers are also vital to the look and feel everything recapitalization against them. This year recapitalization fund size of domestic insurance companies, according to the insurance industry was found to be 1.4 trillion billion won scale.
Hanwha Life plans to raise the ratio of RBC issued 5000 billion of hybrid capital securities in the first quarter of this year. Agricultural Life also considering the issuance of subordinated bonds early this year, about 300 billion won.
Modern life and the life KDB Life issued a 20 billion won, respectively, the size of subordinated debt 50 billion won. Hungkuk Life is a 80 billion won of subordinated debt, Hungkuk fire filled the treasuries issued hybrid capital securities of the scale 92 billion won.
Tong Yang finished a three-party allocation capital increase of the scale end of last year, 624.6 billion won. Allianz Life Insurance doorstep of the family, such as China also conducted a capital increase of 500 million.
The insurance industry while considering the impact on the industry to take advantage of these cards recapitalization and restructuring scheme applies to argue that the smoke is needed. Supervisory authority is planning to restructure its oversight to cover the RBC and LAT (liability adequacy test) based on the standards IFRS17 be announced in the first half of this year.
◇ Mirae Asset Life, not "institutional change risks'
Such 'wigiseol' Mirae Asset Life in only smiled wide. Because it is surpassed last year's asset liability duration significantly expand the duration. Last month, 24 days Mirae Asset Life Insurance, open the year-end closing 2016 earnings conference "widened 1.2 years compared to 5.6 years in 2015 to 6.8 years duration assets last year," he said. RBC ratio of MAS to a successful asset life prolonged duration is expected to be able to maintain the stability.
Asset and liability duration is an indicator of how much change in the value of the company's assets and liabilities to changes in market interest rates are 1% p. Asset liability duration is shorter than the duration of RBC (solvency ratio) is approximately inevitably have an adverse effect on financial stability.
According to Mirae Asset Life Insurance industry secrets to successful asset duration is actively expanding foreign currency seems to be a large spiral effect on long-term bonds investments. Mirae Asset Life Insurance has invested a total of 5.4 trillion won last year's overseas assets. 4.9 trillion won a year earlier compared to 10.2% in the enlarged figures. In particular, it showed that the share of US Treasuries rose 3% p and can reliably long-term investment in foreign assets. I'm also a hwanheji with maturities of less than six months for the overseas assets is one advantage that is easy to expand the duration assets without long-term bonds incorporated. In addition, variable life sales account for less burdensome risk amount is limited warranties, held-to-maturity securities accounted for 37.4%, as was expected a lot less sensitive to rising interest rates.
Mirae Asset Life Insurance said, "This year in June the liability duration expand, but from Mirae Asset Life drought seems minimal impact because previously had expanded asset duration in overseas bonds," said "that recently against stricter regulations for 3-4 years figures It will appear as "that betrayed her confidence.
Thanks to these securities in the asset management divined the growth of Mirae Asset Life. Oil hits Securities, said that "this year will record a net 69.3 billion won (separate) basis (+ 86.3% yoy), Mirae Asset Life" would "be overcome by a special asset liability duration duration expand efforts without expanding" looking out. Meritz Investment Bank Securities also for Mirae Asset Life "debt relief is the most favorable of the life insurance company's future new insurance IFRS (IFRS17) and new solvency ratio system relatively little impact on the introduction of the synergies is expected to PCA Life acquisitions," said investment He urged to BUY.
Mirae Asset Life Insurance has also announced that it would 'substantial business' standing in the apsewoomyeon' worth of new contracts, evaluating the exclusive sales organization and designers from around the year. Wateuna to assess the operating performance mainly initial premium of new contracts so far in the future intends to assess whether to focus on how much profit the company in the future. This alchage a substantial long-term management to encourage product sales that will benefit the company through getdaneun seems to rely kkuryeoga.
Mirae Asset Life Insurance is expected to have a major role in the past, early settlers were also substantial fee-based business structure chaenggigi. As a balance is maintained to maximize fee income holds many product groups ensured a favorable fees system, when a sudden rise in interest rates at low interest rates has the advantage of not incur costs for secondary operations.
Most life insurance companies in terms of high interest rates have been determinate products are sold to large dwaetdaneun the City of Mirae Asset Life Insurance debt burden now is ropda relatively free from negative margin due to the low interest rate concerns. Hamandeok Mirae Asset Life Vice "was the key to the growth of value-driven, depending on internal and external environmental changes and customer happiness insurers survive" such a boudoir for the management and "Mirae Asset Life Insurance is going after the business boudoir out of the insurance operations of scale-oriented retirement planning insurers will do my role as a professional, "he also said convey.
◇ New Year 'PCA Life' retirement planning harboring strong leap forward
Last November, Mirae Asset Life Insurance acquired the PCA Life is waiting for shareholder eligibility screening assessment results for the current financial authorities. According to the insurance industry's gotta merger is expected to be finished until the end of the year no later than September Mirae Asset Life Insurance, Kyobo is expected to enter without difficulty followed by life insurance companies ranked in the top five cooperatives lives. Asset management and investment capabilities to focus on Mirae Asset Life naeseun flagship products such as variable annuity and variable life industry's highest level of PCA Life boasts the annexation of return on pension industry was assessed that the expected synergies.
PCA Life is equipped with a solid financial strength proportion of variable life insurance industry's highest level of up to 77%. Accordingly, the IFRS17 doedo introduced PCA Life Insurance is expected to pay a small additional recapitalization.
Especially the end of last month, according to the Life Insurance Association was disclosed that the PCA Life and Mirae Asset Life Insurance won first place in the variable insurance funds, the rate of return for all sectors. Just before 3 years of Mirae Asset Life of the "India shares the stability baebunhyeong assets" and "Emerging Markets Bond" fund returns are accounted for each one in the stocks mixed, bond funds sector with 29.7%, 22.9%, respectively.
"Chindiah Equity ',' Multi Global Income Fund of PCA Life has recorded each one in the equity and bond yields mixed. In particular, the type of the top five fund half of the total 20 were occupied by Mirae Asset Life Insurance Fund. PCA 13 of 20 fold to combined life fund. Shem is virtually a monopoly Mirae Asset Life Insurance is the top chart.
Mirae Asset Financial Group Chairman Park Hyeon Joo two days were presented send an email to its employees 'future financial' blueprint. Chairman Park Hyeon Joo Asset Management, referring to the strength of the Mirae Asset Financial Group "Mirae Asset Life Insurance becomes a family with the good old PCA Life staff this year," said also say "Mirae Asset Life Insurance companies and pension will be reborn as a professional one."
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