Insurers are also tapping capital markets through subordinated and hybrid debt.

South Korea’s reinsurance market is undergoing major changes following the rollout of IFRS 17 and the Korean Insurance Capital Standards (K-ICS) in 2023, AM Best said.

The rules introduced a risk-based solvency regime and concepts such as the Contractual Service Margin (CSM), adding pressure on insurers and driving demand for new capital solutions.

Reinsurers have responded with capital relief structures, including mass lapse reinsurance to address lapse risk under K-ICS. 

Insurers are also tapping capital markets through subordinated and hybrid debt, whilst coinsurance has emerged as a key tool for managing capital, particularly in life and long-term non-life products.

Activity has increased in recent years, with major deals including a KRW700b ($534m) coinsurance agreement between Korean Re and Samsung Life in October 2023, and Tongyang Life’s KRW200b ($140m) coinsurance deal with RGA in June 2024, later expanded by KRW150b. 

The Tongyang deal marked South Korea’s first cross-border coinsurance transaction.

In property reinsurance, 2025 renewals have turned more favourable for cedents after difficult conditions in 2023 and flat renewals in 2024. 

Per-risk excess of loss covers, once constrained, have seen double-digit rate cuts as insurers used their portfolios and reinsurers’ growth ambitions to secure broader capacity.
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