Korean Re’s Actions to Fight against COVID19
We would like to update our clients and stakeholders about what Korean Re has been doing to keep our people and business safe from the current crisis triggered by COVID-19. The pandemic is wreaking havoc on the livelihood and the economy at an unprecedented scope and scale. Our top priority now is the protection of our employees, our business partners, and our neighboring communities.
Korea, where our head office is located, is cited in the global community as a nation, for its immediate and well-organized reaction to the virus outbreak, and transparent disclosure of infection/death statistics, and innovative and meticulous test execution.
Korean Re has been able to move swiftly under its Business Continuity Plan (BCP), which was built upon our experience when we had to deal with Novel Influenza A and MERS in the recent past. Under this BCP, bi-weekly work shift operation was implemented. Half of staff work from home every other week, while the other half commuted choosing one of the three flexible working-hour schemes.
While working in the office, all employees are required to wear masks as well. Business trips and all other face-to-face contacts and meetings are banned. Head office entry/exit point controls and self-quarantine measures have been beefed up to protect our workplace safe from external harms.
Also, we have provided masks to all employees and installed sanitizers around the office, while all employees are in full compliance with basic requirement rules for personal hygiene and “social distancing”.
Our overseas branches and offices are taking necessary actions following their local authority’s guidelines, and we at the head office have been constantly updated on any specific developments out there. Fortunately, until now, we have seen no infected cases among Korean Re employees.
As of now, the spread of the virus appears to wane in Korea, but we will not let our guards down. Rather, we will keep ourselves more vigilant under the leadership of our contingency management committee.
On the business front, multiple approaches are deployed to maintain our stability. In our view, there are no immediate impacts on reinsurance operations both on domestic and overseas businesses as communicable diseases or losses from pandemics are typically excluded from standard policies.
Sluggish economic growth and inactive in-person sales of personal lines insurance products may bring top-line growth lower than expected. Many analysts in Korea have positive views on underwriting results given that auto and medical indemnity insurance claims have decreased due to lower hospital visits and less driving.
On the basis of our stress tests, there is no direct impact on investment side, but various measures are being taken to manage market risk proactively. As you know, more than half of our investment portfolio is composed of bond with very limited stock exposure. Korean Re’s investment portfolio is sound and stable, and we will keep monitoring the market’s behaviors and take timely actions when needed for any upcoming changes.
Impact on reinsurance side is projected to be very limited. If COVID-19 situation is prolonged, however, our investment yield may go down slightly, but not seriously. Korean Re has a sound bond portfolio, of which fundamentals are robust enough to sustain our risk appetite and tolerance.
Even in cases, worse than the worst-possible financial crisis, let alone the current COVID-19 situation, our capacity is sufficient to fully meet the requirement level of solvency.
Korean Re will ensure in our best effort that our clients are to be served with confidence and stability. Our operational direction and shareholder-friendly policy will remain unchanged. Any potential changes related to COVID-19 circumstances will be communicated to all stakeholders as quick as possible. Also, we will closely watch economic indicators which are aligned with our business results, and any impacts likely to come from deterioration will surely be reported to our clients and partners.
If you have any questions, do not hesitate to contact us. We believe that all of us can overcome the present challenge, and get back to our normal life and business.
We wish all of you, your loved ones, as well as your employees, good health and strength to carry on.