Korean insurers to be given more room for overseas investments

[THE INVESTOR] South Korean insurance companies are expected to be given a freer rein in investing in foreign-currency denominated assets.

According to sources, revisions to the Insurance Business Act allowing more investment in foreign currency assets will be proposed in September. The revision is expected to be passed without much friction with neither the conservative ruling party nor the opposition parties having raised issue with the proposed changes.

At present, local insurers’ investments in foreign currency-denominated assets cannot exceed 30 percent of the company’s assets.

Foreign currency-denominated assets include securities, foreign currencies as well as overseas real estate.

Faced with dwindling profitability of long-term domestic bonds, local insurers have been turning increasingly to overseas investment opportunities but hampered by the limit.

By Choi He-suk (cheesuk@heraldcorp.com)