South Korea's Financial Supervisory Service (FSS) has called on local insurers in the country to increase their loan loss reserves to cope with potential risks facing the industry amid increasing financial market uncertainty. FSS head Jeong Eun-bo has expressed fear for a “perfect storm”, citing the US's move to tighten monetary policy and the fallout of the ongoing Ukraine-Russia war. The FSS earlier said that local insurers saw their combined net profit jump in 2021. The combined net profit came to KRW8.27tr (USD6.8bn) last year, up 36.2% from a year earlier. Their equity, however, shrank from KRW143.3tr to KRW134.6tr due in part to a fall in the valuation of their bond holdings affected by rising market interest rates.
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