Life Insurance Sector Posted Historic Loss Last Year

Life insurance companies are reported to have recorded historic losses, at almost 4 trillion won, last year.
Among the total loss, 69 percent was attributed to Korea Life which piled up a staggering 2.7237 trillion-won loss.
The Financial Supervisory Service(FSS) announced on May 20 that 29 domestic life insurance firms posted 3.9688 trillion won in losses, more than four times that of 1997.
Among the 29 companies, only six - Samsung(95.6 billion won), Kyobo(51.2), Daeshin(20.0), Hungkook(2.6), Cheil(2.2) and Samshin Allstate(1.8)- stayed in the black.
An official at the FSS told reporters the main reason for the snowballed loss was the severer accounting criteria put in place in the insurance industry.
He added when applying 1997's criteria, the total loss would only be 315 billion won, which would have actually marked a 62 percent improvement over the prior year.
To be more in line with international standards, the FSS strengthened its regulations governing life insurance firms' accounting practices for a healthier and more competitive financial structure.
Shang-bok Shim : simsb@joongang.co.kr