Life

Building on a strong 2017, Korean Re’s life business continued to deliver robust growth in 2018, with gross written premiums surging by 10.4 percent year over year to KRW 1,330 billion. Health insurance lines of business drove our domestic business growth. Our effort to partner with our clients to develop new products like simplified issue policies also helped boost our premium growth.

It was also an outstanding year for our overseas life business in 2018, as premium income soared by 21.4 percent, demonstrating the strength of our overseas business strategy. We continued to provide our reinsurance capacity to existing markets such as the U.S., China and Japan, with a steady increase in premiums and solid underwriting profit. We also expanded our overseas life portfolio by assuming new business in Chile and Colombia, helping to boost our global business growth.

In terms of profitability, we delivered good results in 2018 that were comparable to the previous year, with net underwriting profit reaching KRW 47.6 billion. This underscores how effectively we exercised underwriting discipline. Our active portfolio management strategy also contributed to ensuring stable profitability.

The life reinsurance market in Korea has continued to grow, with total premiums amounting to KRW 1,966 billion in 2018 compared to KRW 1,803.3 billion a year earlier. Korean Re maintained a solid market share of 42.4 percent in 2018, representing a sharp increase from 23.9 percent in 2010. Over the same period, our domestic life premium income increased by KRW 54 billion to KRW 923.1 billion.

Korean Re has been well-positioned to provide necessary support to the domestic life insurance market. In response to changing market needs, we have strengthened cooperation with our clients in developing new products such as simplified issue insurance, health insurance for the elderly (silver insurance) and lapse-supported whole life insurance.

Developing such new products has become increasingly important for domestic life insurers to deal with a market downturn. In 2018, life insurance premium income in Korea declined by 2.8 percent due to persistently falling sales of savings policies coupled with a slowdown in the growth of protection products. This downward trend is expected to continue into 2019 as the highly saturated market will see sluggish sales in protection policies amid economic slowdown.

Meanwhile, the local life insurance industry is facing an evolving regulatory landscape. Life insurers will come under pressure in terms of capitalization when IFRS 17 and a new solvency regime called K-ICS are implemented because they will be required to measure their insurance liabilities at current interest rate values. The local supervisory authority is also changing its regulatory strategy from ex-ante control to ex-post supervision. A notable step in this direction was the abolition or liberalization of regulations on rate-making and product development.

As we look to the future, Korean Re will stay committed to supporting our clients in dealing with weakening market conditions and regulatory changes. In addition to our support of product development, we will dedicate ourselves to providing a wide range of reinsurance services that can help our clients manage risk and capital effectively, such as medical underwriting services, informative seminars, and educational programs on a variety of topics including regulatory developments. We are also working to build extensive knowledge and skills on non-traditional reinsurance solutions like financial reinsurance so that we can better serve our clients in line with their changing capital needs.

These initiatives will help fuel our expansion into new product lines and new markets, reinforcing our status as a leader in the domestic life reinsurance market. Globally, we will strive to find new growth engines that will allow us to build a stable and profit-oriented overseas business portfolio, supporting our continued growth and success in the years ahead.

Gross Written Premiums: Life

(Units: KRW billion, USD million)

FY 2018

FY 2017

Life

1,329.6

1,196.4

1,204.6

1,063.0