Korean Re, FY2017: strong results despite the devastating natural catastrophe losses; European business expansion in view

30 May 2018 — Daniela GHETU
Despite the devastating natural catastrophe losses recorded in the second half of the year, Korean Reinsurance (Korean Re) has delivered strong underwriting results for 2017 reporting a combined ratio of 98.4%, as well as a 7.8% y-o-y increase in GWP.

Thus, according to Korean Re's annual report, total GWP amounted last year to KRW 7,208.1 billion (USD 6.36 billion), while net written premiums increased by 6.9% to KRW 5,021.8 billion (USD 4.43 billion). Paid claims increased by 8%, to KRW 3,726.9 billion (USD 3.29 billion) but the loss ratio improved to 79.9%. Net operating expenses climbed by 12.6% to KRW 925.8 billion. The Korean reinsurer managed to record a solid net income of KRW 133 billion for the year, although it was down from the previous year when it posted the second-highest net income in its history.

Korean Re has achieved an average annualized growth of 5.1% over the past five years, with a market share of 60% or so in Korea. "This would not have been possible without our 55 years of experience and knowledge in the domestic market and trustworthy relationships with local primary insurers. As our growth hinges on the development of the local insurance market, we will remain committed to achieving joint growth with our business partners," the company management states in the document. 2017 was a record year for Korean Re also in terms of total assets, as it saw total assets surpassing the KRW 10 trillion threshold.

As an important part of its growth strategy, emphasized Jong-Gyu Won, President and CEO, in his op0ening message, Korean Re has been "setting its sights on overseas markets with the goal of becoming one of the top global reinsurers." He explained: "Since we announced Vision 2050: Value-Creating Reinsurance Leader in 2014, we have been broadening our global network and presence. We established a subsidiary at Lloyd's in April 2015 and two branches in Labuan, Malaysia, in July 2017 and in Dubai, the UAE in January 2018. We have been awaiting approval for our branch in Shanghai from the Chinese insurance supervisory authorities, and work has been underway to open a new European subsidiary in Switzerland by the end of 2019." The company expects the volume of its European business to increase from the current USD 200 million to over USD 300 million by 2025.

In 2018 Korean Re celebrates its 55th anniversary, renewing its commitment to become a "value-creating reinsurance leader in the world."

The full Annual Rep0ort 2017 of Korean Re is available here http://eng.koreanre.co.kr/sub.asp?maincode=503&sub_sequence=523&sub_sub_sequence=&mskin=&exec=view&strBoardID=kui_523&intPage=1&intCategory=0&strSearchCategory=|s_name|s_subject|&strSearchWord=&intSeq=1436