OREANDA-NEWS. Fitch Ratings says in a new report that the negative spread burden of the Korean life insurers is unlikely to be completely wiped out in the short term, as the low-interest-rate environment is persisting for longer than expected. The Bank of Korea has cut the base interest rate twice thus far in 2015 - to 1.75% from 2.0% in March 2015, and again to 1.5% in June 2015.

On the other hand, the Korean non-life insurers continue to grapple with increasing losses for the motor class. The motor class's incurred loss ratio rose steadily from 80.4% in 2011 to 88.5% in 2014 (85.6% at end-March 2015). This resulted from a combination of factors, which include a higher frequency of road accidents, escalating repair costs and fraudulent claims. The General Insurance Association of Korea has identified the stabilisation of motor insurance loss ratios as one of the key priorities for 2015, and urged the industry to make a concerted effort to manage the rising losses.

The 'Korean Insurance Market Dashboard 2015' is available at www.fitchratings.com, or by clicking on the link in this media release.