Korean Reinsurance has achieved a strong year-on-year growth of 16.4% in gross written premiums which totalled KRW9,878.6bn ($7.4bn), with net written premiums growing by 21.1% to KRW 7,337.6bn, the insurer states in its 2022 annual report.
Mr Jong-Gyu Won, Korean Re’s president and CEO, in his “CEO Message” published in the annual report, said, “This robust topline performance was driven by our new coinsurance business and a sharp recovery in premium growth for our overseas business. We also reported a bottomline increase of 2.9%, with after-tax net income amounting to KRW157.9bn. At the end of 2022, our total assets increased by 14.2% year on year to KRW14,978.1bn, while there was an 18.8% rise in invested assets, which totalled KRW8,534.7bn.”
Mr Won also said, “Our business growth has been supported by continued efforts to explore new markets. Global business expansion has been an important pillar of our business strategies to drive growth. Currently, Korean Re has 12 overseas operations across the world – four subsidiaries, four branches and four liaison offices. Half of them were established over the last six years, meaning that our global expansion initiative has notably accelerated in recent years. Since 2020, we have successfully set up a subsidiary in New Jersey, USA, and one branch in Shanghai, China, and a representative office in Bogotá, Colombia. This drive to take our operations into overseas markets will continue going forward.”
Turning to profitability, he said, “By tightening our underwriting guidelines, we have focussed on increasing our retention of good risks and building optimal treaty schemes. Our underwriters have become more selective in what new or existing business they want to pursue, helping to reduce the volatility of our business results.
“Effective portfolio management has been a critical driver of our endeavours to ensure stable and profitable business performance. The share of our overseas business increased from 23.1% in 2017 to 26.5% in 2022, and diversifying the overall portfolio has contributed to stabilising our underwriting results. Based on the underwriting expertise and experiences that we have built over the last 60 years, we have been able to actively respond to market cycles and readjust our business portfolio in ways that have reduced the fluctuation of business results and improved profitability.”
On the investment side, Korean Re has taken a flexible approach to managing its alternative investments and loan portfolio in response to market changes and regulatory developments. As a result, the reinsurer continued to deliver a solid investment yield of 3.5% in the face of a volatile market environment in 2022.
In the run-up to the implementation of IFRS 17 in 2023, the Korean insurance industry had a busy year in 2022 finalising its transition to the new reporting regime. “Korean Re is likely to experience a smooth transition to IFRS 17, as we have been proactive in preparing for IFRS 17 by raising capital and managing financial solvency effectively,” Mr Won said.
He added, “In terms of our environmental, social and governance (ESG) drive, 2022 was a significant milestone as we declared our intention to phase out coal financing. In line with this declaration, Korean Re has ceased to invest in new construction of coal mining and coal-based power plants, and has not been providing facultative reinsurance covers for such new coal projects since January 2023.
Mr Won said, “The economy is set to have a tough year in 2023 with weak growth prospects, and that will present a challenge to our business. Nevertheless, Korean Re is ready to move forward fearlessly, building on its successful 60-year track record.”
Korean Re is celebrating its 60th anniversary this year.