Poised to Expand Markets
- Korean Re eyes overseas markets China in particular

Korean Re's financial highlights as at December, 2004, shows that its total assets came to 2,386 billion won, up 1.1 percent from last year. Invested assets amounted to 1.430 billion won, up 15.5 percent from last year. Shareholders equity totaled 468 billion won, up 13 percent from last year.
Gross premiums amounted to 1,922 billion won, up 5.7 percent from last year, while net premiums amounted to 1,293 billion won. Its net profit totaled 53 billion won.
Invested assets totaled 1,430 billion won, up 15.5 percent from last year, while income amounted to 44.9 billion won, up 10.6 percent from last year. Investment in stocks came to 36 billion won, up 38.5 percent from last year with investment in bonds amounting to 936 billion won, up 25.6 percent. Income amounted to 37.9 billion won, up 54.1 percent from last year.
Short-term investments amounted to 294.1 billion won, with income totaling 7.1 billion won, up 16.9 percent and down 7.8 percent respectively.
Bonds took up 65.5 percent of total invested assets, 20.6 percent for short-term investment, followed by other investment with 7.7 percent, and 3.7 percent for overseas investments.
Korean Re sees natural disasters in the U.S., and Japan are expected to affect market trends. The total losses from the four hurricanes are the worst since Hurricane Andrew struck in 1992. It said estimated insured losses would amount to $25 billion, $21 billion from Andrew alone.
Japan was hit by three Typhoons last summer with estimated insured losses reaching $3.5 billion.
The company said losses for the global insurance industry from Tsunami is rather modest compared with its economic losses with estimated insured losses totaling $2 billion, while estimated economic losses amounting to $14 billion.
Differentiated rate development by line of business, region and loss experience. Property market pricing expected to remain favorable levels in most industries. Casualty market rates expected to remain stable.
Korean Re as a domestic reinsurance market leader: Pricing is reasonable and competitive rate quotation. It has specialists in Korean interests with accumulated technique and knowledge for 40 years and skills of risk evaluation and claim survey.
Its risk management is systematic risk management. Screening by risk management team and committee. It has accumulation control for natural perils and XOL projection covers.
For continued growth, it has continued capital increase due to active creation of new demand for its new products and new markets. It has expanded its overseas markets.
The company has a profitable business model with its business portfolio as follows: 14.4 percent of its investment in the auto sector with 18 percent in long-term investment, 42.2 percent general and 16.6 percent in life. 8.8 percent is overseas.
It has a high portion of bonds totaling 936 billion won out of which 774.1 billion won are in direct investment including 151.7 billion won in government and public bonds, 351.8 billion won in special bonds and 270.5 billion won in corporate bonds. Indirect bond investment totaled 161.9 billion won. Income from direct investment amounted to 33.8 billion won, up 6.2 percent.
Growth strategy for domestic market. New markets: the rapid growth of quasi- insurance markets create continuous demand for reinsurance and opportunities for Korean Re.
Business areas are extended into new products such as casualty and cargo. New insurance business with Korea Shipping Association will be in force in March, this year with an estimated premium income amounting to 6 billion won. The company plans to co-create new products and provide primary insurers with prompt reinsurance coverage to meet new demand from environment changes.
Korean Re's competitiveness is based on studying all kinds of risks and policies in the world. Monitoring the introduction of new regulations and amendments such as on pollution, IT, and private information. It also include designing new coverage and risk pricing and processing prompt reinsurance through global network of partners.
The company's strategies to tackle government project program include supporting the introduction of the government's new products. Introduction of compulsory policy. Road haulers liability effected in January 2005 with estimated premium income amounting to 60 billion won in market volumes.
"wners lessor and tenants" liability; Building , bridge, road, subway, and railroads. And support the design and scheme of policy. They also include natural hazard insurance, pursuit of privatization of public insurance and sea farming insurance.
Growth strategy of domestic market by lines: Property and casualty insurance; Strengthen the foundation of business in order to stably acquire accounts of good quality in the long run. Consolidate the direct relationship with policyholders and extend a direct business relationship with retail brokers. Continue to create new policies and develop new markets. Environment pollution liability and comprehensive military equipment and VIP golf course policy.
For marine insurance, continue solidifying the market initiatives as an unchallenged leader. Primary insurers steadily increase reinsurance cession to Korean Re rather than direct overseas cessions. Extend full facultative business of good quality through direct active marketing to major fleets. Daehan, Hyundai, Bumyang and SK shipping firms.
Continue to create new policies and develop new markets. Shipbuilder's product liability. For life and long-term insurance, the company plans to increase of life and long-term reinsurance needs. Change of policyholder preference from savings to the risk protection.
Risk insurance type: Savings type= 3:7(FY2000) to 6:4(FY2003). Health insurance introduced into market: CI, LTC.
Expanded life cooperative market; Increase the demand of reinsurance facility.
For auto insurance, as a result of new on-line auto insurers' entrance in the market, new reinsurance needs and demand have been created.
Growth strategy for overseas market: Main contributing line: Marine hull insurance. Continue to strengthen Korean Re's position and reputation as one of global reinsurance leaders. Above 100 fleet clients worldwide including Evergreen, P&O, and Nedlloyd's with EPI: $16.5 million. Territory: Asia(60%), Europe(34%) and Others(6%). The development of a new area: Overseas aviation reinsurance business. Korean Re has made another remarkable record in the global aviation reinsurance industry on the foundation of its reputation in the global marine reinsurance industry. It has 11 airlines as its clients including Air France, Lefthanza, Thai Air, etc. with EPI of $5.7 million. The company continue to increase good quality business in global aviation reinsurance industry.
Overseas market is very important for Korean Re's steady growth and Vision 2020 to become one of the top 10 global reinsurers in terms of retention premiums. It will focus on Asian markets and expand to BRICs, South America, and Eastern Europe until 2006.
80 percent of portfolio is underwritten in Asia with P/F by region as follows: Far East Area 27.4 percent, Middle East Area 27.5 percent, Europe 17.9 percent, Facultative 13.8 percent, America 8.2 percent and Singapore 5.2 percent. P/F by class is as follows: casualty 27 percent Marine 27 percent, Fire 37.3 percent and others 8.7 percent.
Business strategy in the Chinese market: Extend business volumes with differential marketing strategy. 3 majors(PICC, Ping An, CPIC). Continue to strengthen business relationship and cooperation. The rest of the primary insurers. Support to develop new products in lines of casualty, liability and life insurance. For newly launched insurers, provide capacities and consolidate business relationship at the early stage. nw