Kyobo Life to hold solid market position in the 12-18 months

Its return on capital (ROC) was 3.0% in 2023.

Moody’s pictured Kyobo Life to maintain its market stance, steady profitability, and strong capitalisation in the next 12 to 18 months, thanks to its good investment performance and an increasing contractual service margin (CSM).

Kyobo Life holds a strong market position as one of Korea's top-three life insurers with an 11.4% market share in 2023. The insurer has a history of stable underwriting profitability, albeit moderate. Its return on capital (ROC) was 3.0% in 2023 under IFRS 17. 

The insurer's conservative estimates of future insurance profits contribute to its high earnings stability. 

Kyobo Life's capitalisation is robust, with a Korea Insurance Capital Standards (K-ICS) ratio of 193.8% as of 31 December. 

Moody's expects the insurer to maintain its K-ICS ratio above 190% over the next 12 to 18 months due to stable earnings, prudent risk management, and focus on duration matching to minimise interest rate risk.

The insurer maintains a low financial leverage with a Moody's-adjusted financial leverage ratio of 10.4% as of 31 December. This ratio is expected to remain stable over the next 12 to 18 months.

Kyobo Life's high-risk asset ratio was 154.4% as of December 31, 2023. The insurer's asset risks are expected to stay elevated due to unfavourable market conditions and its substantial exposure to domestic project financing loans and overseas commercial real estate.