Officials speaks during a meeting in Jongno District, Seoul, May 30. Yonhap

The capital adequacy ratio of Korean insurance companies deteriorated in the first quarter of the year, data showed Friday.

The average capital adequacy ratio of insurance firms stood at 223.6 percent as of end-March, down 8.6 percentage points from three months earlier, according to the data from the Financial Supervisory Service.

The ratio refers to the amount of available capital compared with required funds under the Korean Insurance Capital Standard (K-ICS).

The decline follows an 8.1 percentage-point increase in the fourth quarter of 2023.

The financial regulator attributed the drop in the ratio to a sharp rise in required capital, while available capital grew slightly.

"Available capital under K-ICS came in at 262.2 trillion won ($190.9 billion) as of end-March 2024, up 0.6 trillion won from three months ago," it said in a press release.

Required capital, on the other hand, increased by 4.6 trillion won to 117.2 trillion won amid growing market risks, "such as stock price volatility," it added.

The capital adequacy ratio for life insurers came to 222.8 percent as of end-March, down 10 percentage points from three months earlier, while the ratio for nonlife insurance firms also dipped 6.7 percentage points to 224.7 percent over the cited period. (Yonhap)