Korean Reinsurance Company

Korean Reinsurance Company (commonly known as Korean Re) is a reinsurance company based in Seoul, South Korea. Korean Re's shares are listed on the Korea Stock Exchange. Currently, it ranks as the world's 10th largest reinsurer in terms of gross written premiums.

History

Founded in 1963 as a state-funded enterprise, Korean Re was privatised in 1978. In October 2002, it was nominated as 'Reinsurance Company of the Year' by Asia Insurance Review. In May 2010, Korean Re was selected as "Emerging Market Player of the Year" by Reinsurance Magazine.^[1]

Business

Korean Re has a diversified underwriting portfolio that consists of personal business (long-term, motor, and life reinsurance) and commercial lines (property, marine, casualty, and bond reinsurance). Over the last decade Korean Re has expanded into overseas markets. As of 2015, more than 22% of its gross written premiums were generated from abroad. Korean Re has a network of one branch office in Singapore, two subsidiaries in Hong Kong and London, and five international liaison offices.

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Korean Re's gross written premiumums for 2015 increased by 6.6% USD5,580.2 million, recovering form the slowing trend over the past two years. This growth was driven by an increase in personal lines, such as long term and life insurance. A strong rebound in premium income from overseas property and casualty treaties also bolstred the overall top-line growth. Korean Re is expected to see its net profit for 2016 hit a new high on growing demand for its reinsurance packages from top insurance companies. It forecasts that its net profit for 2016 would reach 190 billion won ($162.1 million), up 1.9 percent from last year’s 186.5 billion won. It is expected that the actual bottom line would be higher than the company’s estimate considered a “reasonably conservative” figure.^[3] Korean Re has been seeing an increase in the number of new contracts with top insurers after Standard & Poor’s raised its credit rating by one notch to A from A- in 2014. S&P hiked the rating two years ago when Korean Re successfully increased capital by issuing $200 million worth hybrid securities for the first time.

Vision 2050

At the beginning of 2014, Korean Re unveiled 'Vision 2050'.^[4] A three-stage road map was created with specific goals for each stage. In implementing the road map, Korean Re will focus on expanding its capital base and improving its bottom-line results, with measures to tighten its risk management policies and readjust its business portfolio.^[5]

CEO Jong-Gyu Won of Korean Re, the world’s 9th largest reinsurer, unveiled Vision 2050 on January 2, 2014 at the head office in Seoul. He stated that the new vision, “Value-Creating Reinsurance Leader” encapsulated the company’s desire to become a globally prominent provider of reinsurance solutions and services. Specifically, Korean Re aims to join the ranks of the global top class reinsurers by 2050, with a gross written premium of KRW 106 trillion and a net profit of KRW 6.4 trillion. It also targets to increase the share of its overseas business to 80% so as to become a household name in the global reinsurance market. The new vision reflects the company’s recognition that expanding into overseas markets should be an essential course of action in the face of challenges such as local economic slowdown and limited potential of the domestic commercial insurance sector, which has been one of the main lines of its reinsurance business.^[6]

References