Kathmandu. Fitch Ratings expects the capital position and profitability of South Korean insurers to stabilize. Fitch expects higher interest rates to ease solvency pressures and improve investment yields.
According to the rating agency, the rising interest rates will ease the pressure on Korean insurance companies with lower liability discount rates. However, insurance companies can still incur short-term real investment losses.
According to Fitch, the Korean insurance capital standard (K-ICS) ratio is expected to improve in 2025. Despite the decline in net income for the year, there was a modest recovery in the first quarter of 2026.
The agency also noted that upcoming regulatory changes, including standardized actuarial assumptions and minimum core capital requirements, could put additional pressure on some insurers.
However, Fitch expects capital buffers to remain adequate across the sector. The impact of which depends on the underwriting practices and actuarial perceptions of individual insurance companies. –Agency
