Korean Re’s Business Results for the First Half of 2021

Korean Re delivered strong underwriting performance for the first half of 2021, with underwriting income surging by 82.3% to KRW 41.2 billion in spite of COVID-19 losses on overseas business and weak underwriting results of personal lines of business. A combination of factors contributed to this robust business performance, including favorable pricing trends in most commercial lines of business and fewer large-loss events. The combined ratio improved to 98.1% compared to 98.8% a year earlier. In particular, our domestic commercial business sharply improved to an 86.2% combined ratio from 98.8%. The strong improvement in underwriting results led our net income to grow by 1.8% to KRW 120.3 billion for the first six months of the year.

*The above figures are based on the company’s separate financial statements, with foreign currency effects being excluded. The combined ratio for the overseas business would decrease to 89.1% as if basis excluding COVID-19 losses of KRW 57.6 billion.

Investment income declined to KRW 116 billion due to smaller gains on the sale of bonds, but returns on loans and alternative investments remained fairly good, generating an investment yield of 3.6%. This solid investment yield came amid a persistently low yield investment climate. We have continued to focus on rebalancing our investment portfolio to maintain an asset mix that best reflects our risk and return profile.   

In terms of premium growth, we suffered a marginal setback. Our gross written premiums decreased by 0.3% to KRW 4,168.3 billion in the first half of 2021 due to a reduction in overseas business and domestic commercial business. The contraction reflected our strict and selective underwriting guidelines, non-renewal of unprofitable accounts in some territories, and the high base in the same period of the previous year due to large-volume processing of statements of accounts from overseas life business. However, ongoing market hardening is expected to support the top-line growth of our overseas business later this year.

Our domestic business growth slowed to 1.2% in the first half of the year compared to 3% in the same period of the prior year. Commercial lines of business showed some contraction in premium growth mostly due to the base effect from one-off growth involving satellite launch insurance in 2020. On the other hand, personal lines of business recovered to a 3.5% growth backed by long-term and motor businesses, but our focus remained on portfolio management to improve the overall profitability of personal lines.

< Korean Re’s Business Results for the First Half of 2021>

                                                                                                                                                             (Unit: KRW billion)

*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.