Insurance company's solvency capacity, slightly improving to 212.3% in 2025... Life and property insurance companies have mixed fortunes

By the end of 2025, insurers’ solvency ratios have slightly improved overall, but the trends for life insurers and casualty insurers are moving in different directions.

According to “The Current Status of Insurance Companies’ Solvency Ratios as of the End of December 2025” released by the Financial Supervisory Service on the 13th, the solvency ratio (K-ICS) for all insurers applying transitional measures is 212.3%, up 1.5 percentage points from 210.8% in the previous quarter. The solvency ratio is a representative health indicator showing how much capital buffer an insurance company has to withstand unexpected losses. It is calculated as available capital divided by required capital; the higher the ratio, the stronger the company’s financial resilience.

By industry, the improvement is relatively more pronounced for life insurers. Life insurers’ solvency ratio is 205.8%, up 4.4 percentage points from the previous quarter. In contrast, casualty insurers are at 221.9%, down 2.2 percentage points. Among large life insurers, Samsung Life is at 198.0%, up 5.2 percentage points; Kyobo Life is at 226.0%, up 20.8 percentage points; and Hanwha Life is at 157.5%, down 0.7 percentage points. In the casualty insurance industry, Samsung Fire & Marine is at 262.9%, down 13.1 percentage points; DB Insurance is at 218.2%, down 8.2 percentage points; and Meritz Fire & Marine is at 241.3%, down 2.4 percentage points. By contrast, Hyundai Marine & Fire is at 190.1%, up 10.3 percentage points; and KB Insurance is at 191.5%, up 0.4 percentage points. Lotte casualty insurance, which received timely corrective measures from the financial authorities, is at 159.5%, up 17.5 percentage points.

Behind the overall improvement in solvency ratios, the effect of capital expansion has played a greater role. At the end of 2025, available capital was 284 trillion won, up 9.3 trillion won from the previous quarter; required capital was 133.8 trillion won, up 3.5 trillion won. Although the Insurance Contract Margin (CSM, the present value of expected future insurance profits) decreased by 5.4 trillion won and settlement dividend outflows were 3.6 trillion won, due to rising stock prices the accumulated amount of other comprehensive income increased by 15.9 trillion won, and current net profit also increased by 900 billion won, allowing total available capital to expand. Required capital also increased due to higher stock-related risk amounts caused by rising stock prices, but the increase was smaller than that of available capital.

Some analysts believe that the impact of rising interest rates on the insurance industry has also created differences. In general, changes in interest rates affect the valuation of both insurers’ assets and liabilities, but the Financial Supervisory Service believes that this round of interest-rate increases is relatively more favorable for life insurers. While the solvency ratio level for casualty insurers is generally higher than that for life insurers, based on market variables during the quarter, some large companies showed a downward trend.

The Financial Supervisory Service said that, as uncertainty in financial markets increases due to factors such as the situation in the Middle East, it will strengthen supervision to ensure that insurance companies maintain sufficient solvency. In particular, for companies with relatively fragile capital structures, it plans to continue inspections, with the direction being to improve capital quality and strengthen risk management. This situation indicates that, depending on future changes in interest rates, stock prices, and overseas geopolitical risks, the trend in insurance companies’ solvency indicators may again diverge.