Korean insurers shun structured notes ahead of IFRS 9

Prospect of earnings volatility blamed as big buyers of notes turn to less exotic assets

IFRS 9 trendline

Insurance companies in South Korea are cutting back on purchases of structured notes, ahead of the introduction of accounting standards that make the products a source of earnings volatility. 

Individual insurers are estimated to have sunk as much as 20% of their assets into structured notes, as they sought to beat the returns on offer in traditional bond portfolios. Now, the sector is switching to simpler investments that will enjoy a more favourable accounting treatment when the new regime

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