The Financial Supervisory Service said on the 28th that insurers' outstanding loan balance at the end of June was 266 trillion won, up 1.9 trillion won (0.7%) from the previous quarter.
Of that, the outstanding loan balance for household loans was 136.1 trillion won, up 1.6 trillion won (1.2%) from the previous quarter. The outstanding loan balance for corporations was 129.8 trillion won, up 300 billion won (0.2%) over the same period.
The delinquency rate on loan receivables was 1.08%, up 0.26 percentage points (p) from the previous quarter. The delinquency rate for household loans was 0.83%, down 0.04 percentage points (p) from the previous quarter, while the delinquency rate for corporations rose to 1.21%, up 0.41 percentage points (p).
The nonperforming loan ratio also rose. Insurers' nonperforming loan ratio at the end of June was 1.31%, up 0.18 percentage points (p) from the previous quarter. The nonperforming loan ratio for household loans was 0.67%, down 0.01 percentage points (p) from the previous quarter, but the nonperforming loan ratio for corporations climbed to 1.62%, up 0.27 percentage points (p).
With market volatility widening recently and the economic recovery delayed, delinquency and nonperforming loan ratios in the insurance sector appear to have risen. The financial authorities plan to guide insurers to sufficiently bolster their loss-absorbing capacity and strengthen asset soundness management to brace for higher delinquency rates.