Insurance loan growth slows in third quarter

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SEOUL, 06 Dec. (Yonhap) – South Korean insurance companies saw their lending increase at a slower pace in the third quarter compared to three months earlier due to tighter rules on household lending, data revealed on Monday. .

Insurer loans outstanding stood at 262.4 trillion won ($ 222 billion) at the end of September, up 2.1 trillion won from the previous quarter, according to data from the Financial Supervisory Service (FSS).

Yet that figure was down from the quarterly increase of 5.2 trillion won in the previous quarter. A year ago, it was up 2.8 trillion won.

The slowdown came amid tighter rules for household lending, which are aimed at restraining the country’s growing household debt.

Loans to households increased by 1.1 trillion won to 127.7 trillion won at the end of September, mainly on loans backed by insurance premiums.

Their business loans stood at 134.5 trillion won, up 1.1 trillion won from three months earlier.

The loan default rate, which measures the proportion of loan principal or interest overdue for at least one month, was 0.14%, down 0.03 percentage points from the second quarter.

The figure for loans to households was unchanged at 0.29%, while that of loans to businesses fell by 0.03 percentage point to 0.07 percentage point.

The ratio of non-performing loans from insurers stood at 0.12% at the end of September, down 0.12 percentage points from three months earlier.

The FSS said it will closely monitor loans from insurers and work to get them to build up sufficient loan loss reserves amid the coronavirus pandemic.