Solvency ratio jumps from 155% to 189.6%; long-term whole-life policies drive CSM quality gains

Tongyang Life Insurance CEO Sung Dae-kyu. [Tongyang Life Insurance]
Tongyang Life Insurance CEO Sung Dae-kyu. [Tongyang Life Insurance]

Tongyang Life Insurance CEO Sung Dae-kyu is approaching his first anniversary at the helm at the end of this month. Sung took charge in July last year with the mandate of expanding Woori Financial Group into the insurance sector, and has since focused on strengthening financial soundness and overhauling the company's sales practices.

Sung's efforts to rebalance the asset portfolio and shift the sales mix toward protection-type products have paid off: the company's solvency ratio under the Korean Insurance Capital Standard (K-ICS) climbed from 155.5 percent at the end of 2024 to 179.8 percent at the end of 2025, and further to 189.6 percent at the end of the first quarter this year.

The gains were driven by issuing subordinated bonds and entering coinsurance agreements to build up available capital, while reducing exposure to risk assets such as equities and alternative investments to lower required capital. The duration gap — a measure of asset-liability maturity mismatch — also narrowed sharply over the same period, reducing the sensitivity of the company's capital base to interest rate swings.

Sung has also been working to improve the quality of new-business contractual service margin (CSM) by pulling back on sales of certain national health insurance products and short-term whole-life policies, which carry high loss ratios and volatile margins, and shifting toward a greater share of long-term whole-life policies.

To stabilize the organization, Sung visited sales offices across the country to engage directly with staff, while internally promoting a culture of open communication through town hall meetings, brown-bag sessions and a junior board program.

Sung has been focusing on a strategy to expand the senior-care business by leveraging the strengths of the Woori Financial Group structure. The model combines the trust functions of a bank with the care services of an insurer, allowing dementia patients and elderly customers to access care services based on their own assets without requiring family involvement. Tongyang Life Insurance is expected to spend the next three to four years building up its capabilities before the group moves to scale the senior business in earnest.


psj@heraldcorp.com