Korean Re, a leading reinsurance company in Asia, is now aiming to be one of the top class reinsurers in the world

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Subject Korean Re’s Business Results for the First Nine Months of 2022

Korean Re’s Business Results for the First Nine Months of 2022

 

Korean Re achieved a strong premium growth of 8.8% for the first nine months of 2022 compared to the same period of the prior year, with gross written premiums reaching KRW 6,943 billion. This robust top-line performance was driven by new coinsurance business and a sharp recovery in overseas business growth.

Domestic personal lines of business grew by 9.3% on the back of coinsurance business. Excluding coinsurance transactions, premium growth remained slow at 1.5%. While our domestic life business diminished due to portfolio adjustment, we saw our long-term and motor businesses continue to grow solidly.

We reported a 20.5% increase in premiums from overseas business, supported by ongoing market hardening. In the current favorable rating environment, our overseas business delivered robust growth in both treaty and facultative, while casualty and motor grew strongly as a result of our strategic portfolio management to increase the share of non-property.

< Korean Re’s Business Results for the First Nine Months of 2022>

(Unit: KRW billion)

 

Q3 2021

Q3 2022

Change (%)

Gross Written Premiums

6,379.3

6,943.0

8.8

Net Written Premiums

4,548.5

5,020.5

10.4

Underwriting Income

40.7

-47.4

-

Combined Ratio (%)

98.9

100.7

1.8%p

 - Loss Ratio (%)

86.6

86.0

-0.6%p

 - Expense Ratio (%)

12.3

14.7

2.4%p

Investment Income

192.2

198.2

3.1

Operating Income

220.0

150.2

-31.7

Net Income

177.9

131.0

-26.4

Operating Assets

7,077.6

8,234.0

16.3

Total Assets

13,298.9

14,496.3

9.0

Shareholders’ Equity

2,556.2

2,797.5

9.4

Return on Equity (%)

9.5

6.5

-3.0%p

*The above figures are based on the company’s separate financial statements, with foreign currency effects being excluded for underwriting income, investment income, and combined ratio.

 

Korean Re continued to face a challenging environment in terms of bottom-line results in the third quarter due to large natural catastrophe claims and a volatile economic environment. We delivered KRW 131 billion in net income, down 26.4% from a year earlier. The deterioration in profit was attributable to weaker underwriting results of our overseas business amid growing COVID-19 losses, coupled with natural catastrophe claims. We reported a combined ratio of 100.7%, up 1.8%p year on year, with the ratio for overseas business rising to 106.1%.

On the other hand, domestic commercial business remained profitable, generating a combined ratio of 90%. This solid underwriting profitability was backed by upward pricing trends in most commercial lines of business and fewer large-loss events in Korea. Domestic personal lines of business improved to a combined ratio of 100.5% from 101.6% a year earlier as we withdrew from poorly performing contracts. 

 

Korean Re achieved good investment results on the back of a strong growth in invested assets and gains on the sale of stocks, with total investment gains rising by 3.1% to KRW 198.2 billion in the first nine months of 2022. The total invested assets soared by 16.3% due to coinsurance transactions and the issuance of hybrid capital securities. There were year-on-year decreases in gains on the sale of bonds and returns on alternative investments, while fixed-income investments performed fairly well. In the first nine months of the year, we posted an investment yield of 3.5% in spite of increased market volatility. We will continue to keep a close watch on market developments so as to deliver stable investment performance.