South Korean insurers' RBC ratio falls to 256% in Q1 2021

The decline came as a hike in bond yields incurred valuation losses from bond investments.

The risk-based capital (RBC) ratio of South Korean insurers fell for the second consecutive quarter by 19 percentage points to 256% in Q1 2021, reports Yonhap News Agency.

According to the country’s Financial Supervisory Service (FSS), the RBC ratio decline came as a hike in bond yields incurred valuation losses from their bond investments.

Local insurers are required to maintain the ratio at 100% or above, but they are advised to have ratios of at least 150%.

Insurance firms in South Korea are required to gradually increase their capital reserves to better cope with new global accounting standards for insurers, which are set to go into effect in 2022.