Insurers are also tapping capital markets through subordinated and hybrid debt.<\/p>\n
South Korea<\/a>\u2019s reinsurance<\/a> market is undergoing major changes following the rollout of IFRS 17 and the Korean Insurance Capital Standards (K-ICS) in 2023, AM Best<\/a> said.<\/p>\n 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.<\/p>\n Reinsurers have responded with capital relief structures, including mass lapse reinsurance to address lapse risk under K-ICS.\u00a0<\/p>\n 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.<\/p>\n 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\u2019s KRW200b ($140m) coinsurance deal with RGA in June 2024, later expanded by KRW150b.\u00a0<\/p>\n The Tongyang deal marked South Korea\u2019s first cross-border coinsurance transaction.<\/p>\n In property reinsurance, 2025 renewals have turned more favourable for cedents after difficult conditions in 2023 and flat renewals in 2024.\u00a0<\/p>\n Per-risk excess of loss covers, once constrained, have seen double-digit rate cuts as insurers used their portfolios and reinsurers\u2019 growth ambitions to secure broader capacity.
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