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제목 Korean Re’s Business Results for 2021

Korean Re’s Business Results for 2021

Korean Re achieved strong business results for 2021, with net income increasing by 18.4% to KRW 178 billion. Although underwriting profitability remained weak, increased investment profit boosted overall bottom-line performance. We reported an underwriting loss of KRW 24.9 billion as our overseas business experienced weaker underwriting results due to COVID-19 losses and natural catastrophe losses. These figures are based on the company’s separate financial statements.

The overall combined ratio stayed flat at 100.3%, with the combined ratio for overseas business soaring to 102.1%. Our domestic personal lines of business continued to deteriorate, resulting in a combined ratio of 101.9%, amid persistently high loss ratios of medical expense insurance and long-term property fire losses.

However, we made an impressive improvement in domestic commercial business, with its combined ratio falling to 90.8% from 99.7%. This higher underwriting profitability was driven by favorable pricing trends in most commercial lines of business and fewer large-loss events in Korea.


*The above figures are based on the company’s separate financial statements, with foreign currency effects being excluded.

 

We saw our investment profit increase by 3.4% to KRW 244.8 billion, backed by returns on alternative investments. In spite of decreased gains on the sale of bonds, the yield on alternative investments increased strongly as we continued our expansion into new and diversifying sources of investment return to achieve stable investment results. Our alternative investment portfolio consists mostly of high-quality assets that generate stable cash flows. Overall, we posted an investment yield of 3.7% in a challenging investment climate arising from the COVID-19 pandemic and increased market volatility.

< Korean Re’s Business Results for 2021>
                                                                                                                                        (Unit: KRW billion)

 

2020

2021

Change (%)

Gross Written Premiums

8,377.1

8,373.6

-

Net Written Premiums

5,863.0

6,001.2

2.4

Underwriting Income

-25.2

-24.9

-

Combined Ratio (%)

100.3

100.3

-

 - Loss Ratio (%)

85.7

86.8

1.1%p

 - Expense Ratio (%)

14.6

13.5

-1.1%p

Investment Income

236.7

244.8

3.4

Operating Income

219.2

220.2

0.5

Net Income

150.4

178.0

18.4

Operating Assets

6,417.6

7,161.4

11.6

Total Assets

12,411.6

12,861.9

3.6

Shareholders’ Equity

2,463.1

2,559.4

3.9

Return on Equity (%)

6.1

7.1

1.0%p

*The above figures are based on the company’s separate financial statements, with foreign currency effects being excluded for underwriting income, investment income, and combined ratio.

 

In terms of top-line performance, Korean Re showed flat growth, with gross written premiums of KRW 8,373.6 billion in 2021. Our domestic business growth slowed to 0.8% compared to 2.7% a year earlier. While domestic personal lines of business modestly expanded to a 1.9% growth backed by long-term and motor businesses, we delivered negative growth in domestic commercial business as we held fast to strict and selective underwriting guidelines. The reduction also reflected the base effect from one-off growth involving satellite launch insurance in 2020.

Our overseas business growth also turned negative, with premiums decreasing by 2.5%, in part because we reduced our participation in underperforming property proportional treaties in China and the Americas. Other factors include non-renewal of unprofitable business and the high base in the previous year when we booked a large volume of new overseas life business. In the face of rising overseas losses related to COVID-19, we also adjusted our overseas life business portfolio, which resulted in a sharp drop in gross premium income. With ongoing market hardening, however, we will be able to gain growth momentum for our overseas business going forward.

 
 
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