[Korea gimmingyeong financial newspaper reporter] showed decline in risk-based capital (RBC) ratio of life insurers last year significantly. In connection with the introduction of international accounting standards (IFRS17) attributable to Jin, the evaluation of the financial authorities challenging. Away from the fire insurance on their feet each one is in full swing in the capital increase motion.
According to the Financial Supervisory Service's RBC ratio of 25 domestic insurers but are recorded based on the 541.46% end of 2015 slumped by 341.94 percent late last year.
RBC ratio is calculated by dividing available capital to required capital as a key indicator of how much potential that an insurer may pay the insurance money to policyholders. RBC ratio in the insurance industry is regarded as a leading indicator of the financial strength of insurance companies.
In particular, △ for Hungkuk Life 145.39%, 125.68% △ KDB life shown to fall short of the 150% FSS gwongochi on and off the red light is on capital adequacy evaluation.
There are life insurance industry thus fell RBC ratio is shown to be a significant impact on IFRS17 (New International Financial Reporting Standards), which is introduced from 2021. FSS is expected to embark on strengthening prudential regulations on insurance companies IFRS17 soft landing plan. High interest savings insurance insurers who have continually sold to the market enlarged boomerang returns to the line following the introduction IFRS17. Because the evaluation system of liability (insurance for insurers should be paid) to be changed in the current market cost. Up to reflect the interest rate should be calculated at the time the debt is not much choice but to increase the insurance burden.
As a result, the recapitalization of insurers accelerated in accordance with the clock.
Hanwha Life has recently succeeded in hybrid securities issued. It issued hybrid capital securities in the form of the initial public offering of Hanwha Korea Life Insurance. Issued interest rate was determined by adding to the 270bp 5-year government bond yields to 4.582%.
NH NH Life plans to embark on 3000 billion of subordinated bonds issued during the second quarter. NH NH life is expects to be 200% of its approximately 13% p RBC right through this capital.
The subordinated debt issued in January to 400 billion DGB life being also reviewed 600 billion of additional issue. Insurers of Hyundai and Dongbu is also reportedly to issue subordinated bonds this year.
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