Korean Re,
Riding the Wave
of Success
Korean Reinsurance Company, Korea's sole indigenous reinsurer, continues to post high profit since Chairman Park took the helm from 1998.
In fact, Korean Re (Chairman & CEO Park Jong-won) is reaching for higher goals. It has started its journey to be among the top 10 reinsurance firms in the world by implementing its Vision 2020 strategy. In order to achieve the long-term vision, under the stewardship of Mr. Park, the company plans to make this year the bridgehead for meeting the halfway goal in 2010, with total assets and gross written premiums reaching 5 trillion won respectively.
Chairman Park took over the head of the company in July of 1998, and has played a key role in turning the company around from the brink of bankruptcy through corporate restructuring, and management reform.
Proven by his nickname "Midas hands" he turned a failing company into the top reinsurance firm in Asia and 16th in the world, which is one of the reasons why he is recognized as one of the best public servant turned CEOs.
Following the financial crisis in 1998, Korean Re faced a crisis due to enormous losses from its bond insurance business. The company incurred an operational loss of 381.8 billion won during the crisis, which led to the year-end loss of 280 billion won, putting the company on the verge of bankruptcy.
It was at this crucial point that Chairman Park took over the top management position of the company. The initial step taken by the new CEO was to reduce the payroll by 30 percent, a bone-shearing job, to save the company from near bankruptcy. Various measures and restructuring for survival worked; the company was expected to record a deficit of 280 billion won that year, but under the strong leadership of the new CEO, it recorded a surplus of 3.7 billion won without the infusion of outside or public funds.
During the following 7 years, Korean Re recorded an average annual growth of 13.6 percent, putting the company among the top-ranking companies in the country.
The company recorded accumulated profits of 356.6 billion won during the latest 7-year span (FY '99-'05.11), which is 4.3 times more than the 82.7 billion won accumulated in the 36-year span from 1963 to 1998. In 2002, in particular, the company's profit totaled 68.1 billion won, the highest in its history, boasting annual profits ranging from 50 billion to 60 billion won.
In the asset sector, the company's total assets amounted to 2 trillion won at the end of FY2002 with operational assets reaching 1 trillion won. The company's capital, the core indicator of a reinsurance firm's competitive strength, expanded to 710 billion won in November, 2005, up 2.7 times compared to 6 years ago.
The solvency margin ratio, the measure of management stability of an insurance firm, recorded 193.4 percent in November of 2005 as well. The productivity per employee came to 13.6 billion won with profit per employee amounting to 300 million won, proving that Korean Re belongs to the top-class of financial firms in the country.
The stunning record can be credited to the introduction of a systemic profit concept to every sector of the company's operation as well as a scientific and thorough risk management process to minimize losses. In addition, by adopting a stable investment strategy, the company invested conservatively in safe areas, mostly in national and public bonds. Only 6 percent of its operational funds or 80 billion won were invested in blue chip stocks with more than 70 percent of the funds going to sound bonds under its stable asset operation strategy, resulting in a considerable improvement of its financial structure.
In the first half of FY'05 (April to September), the company's net profit increased 2.8 percent compared to the same period in the previous year, with adjusted net profit amounting to 55.5 billion won, up 22.2 percent in comparison to the figures of the first half of FY'04. Based on these excellent results, the company was recently ranked 16th among reinsurance firms in the world and continues to maintain the No.1 position in Asia.
In addition, the company shares were listed in the KOSPI 200 index in December of 2004, and in May last year, the company was added to the KOSPI 100 Index, which lists the top 100 firms regardless of industry. Reflecting its remarkable results and market confidence, Korean Re's market value soared totaling 1.5 trillion won in September, to rank second in the insurance industry. Future projections are bright, as stock market analysts believe that there is more room for growth based on the company's excellent performance record in recent years.
Chairman Park has been credited with successfully managing Korean Re to become a world-renowned global reinsurance firm following the change of its corporate identity. He has strived to make the company become progressive and futuristic, shedding the static image the company had before.
Along with mental capability, Chairman Park believes in strengthening the morale and teamwork of the company employees through physical training. In fact, he has laid out an ambitious plan for all of the management and staff to scale a number of mountains in the Baekdu Mountain Range until 2009 and climb Mt. Baekdu located in North Korea in 2010 to complete the physical training program.
Like Chairman Park's motto, "crises are not obstacles, but opportunities" Korean Re will continue to venture into the vast "Blue ocean"of insurance opportunities. nw

Korean Re Chairman & CEO Park Jong-won.

Chairman Park and his staff on a visit to a village for social work under "One Company, One Village Program."

Chairman Park waving Korean Re's company flag with new corporate identity at a ceremony for the declaration of the new CI.

Chairman Park and Korean Re employees building a house under the Building Houses with Love Program.

Chairman Park and his staff at the summit of Mt. Dogyu.