In 2018, Korean Re continued to deliver stable premium growth in spite of unfavorable market conditions, with gross written premiums increasing by 4.9 percent to KRW 7,558.5 billion.
We have come through a year that was filled with daunting challenges, such as adverse catastrophe experience and rapidly changing financial market conditions. The prolonged period of sluggish economic growth and low interest rates continued to pose a setback for the (re)insurance industry. Navigating an ever-evolving regulatory environment was another important challenge for the industry as the insurance supervisory landscape has been in a constant state of flux.
In the face of these challenges, we held fast to our belief that hard times are often blessings in disguise, and Korean Re managed to generate profitable growth against all odds. Hardships may offer a new perspective, depending on how we decide to see them. With this in mind, we remained committed to developing new markets and growth engines that can help balance out less profitable business and shore up our long-term growth.
This effort to rebalance our business portfolio has been backed by a broadening network of our global presence. Following the opening of our Labuan branch in July 2017, we got another branch up and running in Dubai, the UAE in January 2018. Our Shanghai branch was pre-approved by the Chinese insurance authorities in September 2018, and is now awaiting final approval for a business license. We also plan to open a new subsidiary in Zurich, Switzerland in 2019, with the aim of growing our business in Europe, where we have been in operation as a member of Lloyd’s since the establishment of a subsidiary at Lloyd’s in April 2015.
In 2018, Korean Re continued to deliver stable premium growth in spite of unfavorable market conditions, with gross written premiums increasing by 4.9 percent to KRW 7,558.5 billion. Our net written premiums grew by 5.9 percent to KRW 5,318 billion. We saw our profitability impacted by underwriting losses, with net income decreasing by KRW 30.1 billion to KRW 102.9 billion. Total comprehensive income, which represents our capacity, increased by KRW 19.9 billion to KRW 118.9 billion.
Our total assets reached KRW 10,750.9 billion as of the end of 2018, up KRW 685.6 billion compared to a year earlier, while there was an increase of KRW 256.1 billion in invested assets, which totaled KRW 5,879.6 billion.
These results fell short of our expectations as an unusually high frequency of natural catastrophes aggravated the overall loss ratio. Indeed, 2018 was another eventful year following exceptional catastrophe losses worldwide in 2017. However, we managed to generate profitable growth against this backdrop of above-average loss experience for two years in a row. Achieving profitable growth will continue to be an important goal for Korean Re in the years to come.
In 2019, Korean Re will remain focused on improving its business fundamentals and bottom-line results. As our future growth will essentially depend on how we expand our business abroad, we will continue to make our way into overseas markets. Developing a meaningful track record in new markets is not easy and takes a great deal of time and effort. We may not see any significant outcome in the short term, but we are confident that robust footholds are being built in different regions in a way that boosts our growth in the years ahead.
The market situation surrounding our industry keeps evolving, and we are tasked with keeping up with the pace of changes and remaining supportive of our clients. Regulatory reforms and tech-driven market changes are gathering pace in a manner that fundamentally affects the way we and our clients do business. This calls for a high level of preparedness against future changes and nimbleness when it comes to taking action as needed. In addition, thorough risk management is another important aspect of remaining relevant to the rapidly evolving business environment and maintaining the trust we have built with our clients across the market.
When Korean Re celebrated its 55th anniversary in 2018, we envisioned a future where the company thrives to become a 100-year-old enterprise. It is never easy for a company to last for more than a century in today’s harsh business environment, but I have a firm belief in entrepreneurship built on a can-do spirit, which enables the company to keep reinventing itself so that it can survive the ebbs and flows of the market. Moreover, Korean Re has a clear vision in place to become a value-creating reinsurance leader, and it is this vision that keeps us moving forward.
On our path toward realizing the vision, we will stay committed to providing reinsurance services of the highest possible standards to deliver value for our clients, shareholders and employees, and ultimately support their growth and prosperity. This mission clearly represents the company’s raison d’être, and it is exactly what everyone at Korean Re does every day.
We thank you for your continued support of Korean Re and look forward to working more closely with our clients and other business partners to bring growth and value to all stakeholders.
Thank you.
Jong-Gyu Won
President and CEO