Korean insurers are maintaining stricter risk management controls amid growing wariness of overseas alternative investments, including private credit funds and real estate funds, S&P Global Ratings said Wednesday.
The assets seem to post reduced risk-adjusted returns that do not meet insurers' expectations, S&P said.
Insurers are now honing in on highly rated bonds and fixed-income securities as domestic bond yields increase, the rating agency said.
The rating agency views controlled exposure to riskier overseas private credit and real estate funds for Korean insurers.
Rated insurers will endure stress linked to these assets at their present rating, but an ensuing shock will hit profitability, according to S&P.