Meritz Fire & Marine Insurance Co., a South Korean nonlife insurer, said Thursday it plans to raise 55.5 billion won ($49.6 million) via a rights offering in a bid to improve its financial soundness.

A total of 4.63 million new shares will be issued at 11,990 won each, of which 4.57 percent will be allotted to the Government of Singapore Investment Corp., a Singapore sovereign wealth fund, the company said in a regulatory filing.

Meritz Fire had been pushing for issuing new shares in a bid to improve financial soundness. Insurers here have been suffering a slump due to the slowing economy.

The risk-based capital ratio of Meritz Fire stood at 173.6 percent as of end-2012, just managing to stay above the regulator’s recommended level of 150 percent.

The RBC ratio measures an insurer’s ability to absorb losses and is the key gauge of financial stability.

Meritz Fire said it expects its RBC ratio to go up by 10 percentage points after the rights offering. (Yonhap News)