Korean Re to
Boost Global Operation

Company aims to be 5th largest global reinsurance firm by 2020 with operations in key reinsurance markets

Korean Reinsurance Corp. has decided to set up a branch in Dubai under its plan to become a global reinsurance firm by developing an insurance product for technology in the Middle East following its success in the development of ship insurance in the European insurance market, the company said recently.
The Dubai branch is projected to be a springboard for the company's advancement into the insurance markets in India, Eastern Europe and South America, the company said.
The region's fast-growing construction market has been hugely due to a tremendous inflow of oil dollars thanks to high oil prices, generating the need for various insurance products such as coverage for construction projects, assembly projects and technologies. The company wants to take advantage of the special economic situation in the region through an aggressive marketing program developed by providing close-range market information on the region's economy by being in the center of the region in the form of its Dubai branch.
Through the Dubai branch, the reinsurance firm expects to expand its presence into the nearby markets such as India, Turkey and Africa in the mid-to long-term perspective.
By getting first-hand information on the global reinsurance market, including contract information from its branches overseas, the company would be able to select only low-risk insurance contracts to secure its increased profits.
Until now, only Korean construction and manufacturing firms have set up operations in the Middle East, with Korean Re the first insurance company to establish an operation in the region. The Dubai branch will be able to offer various consultations on insurance and reinsurance with regard to the management of various risks associated with doing business in the region, the company said.
Korean Re has overseas rep offices in Tokyo, London, New York, Beijing and Dubai, a branch office in Singapore and a local subsidiary in Hong Kong.
The Middle East emerged as a new target market in the 2000s and the market for technology insurance expanded rapidly with the boom in construction in the region amid the surging economy fueled by a huge inflow of oil money.
Under the company's "2020 Vision"strategy, Korean Re will try to upgrade itself to rank among the top five reinsurers in the world by 2020. The company is the world's 13th largest reinsurer now, but it wants to push itself to be in the top 10 by 2010.
To reach its growth target, the company will acquire stakes in local insurance companies in countries with growth potential in an effort to diversify its business portfolio, CEO Park Jong-won said.
Park said the company plans to sharply increase the share of its overseas business in the near future. With the upgrade of Korean Re's credit rating to A- by S&P in late 2006, he said the company's overseas business focus will shift from Asia to the Middle East, Eastern Europe and South America, during an initial stage. Then, under a second phase, the company will move on to the rest of Europe and the Americas.
"Korean Re intends to evolve from a regional insurer to a truly global one,"Park stressed. By 2020, the company is targeting $5 billion in overall premium income, with overseas business accounting for 25 percent, versus the current 14 percent, and Korean Re plans to raise this share to 50 percent by 2020. "We seek to rank among the top five global reinsurers,"he said.
Well aware that the Capital Market Consolidation Law will have a deep impact on the financial industry, Park and senior management have been devising new growth models while seeking to optimize synergy gains through alliances with prominent reinsurers abroad. He said that Korean Re's share of the world reinsurance market will likely double to 5 percent by 2020 from about 2 percent today. nw

President and CEO Park Jong-won of Korean Reinsurance Corp.