Korean Re Switzerland AG obtains ‘A’ rating from S&P Global Ratings
▪ Korean Re Switzerland AG got off to a good start as it obtained ‘A’ rating from S&P Global Ratings
▪ The Swiss subsidiary is expected to play a critical role in the group’s strategy to grow its overseas business
Korean Re Switzerland AG (Korean Re Switzerland) received local currency long-term issuer credit and financial strength ratings of ‘A’ from Standard & Poor’s Global Ratings (S&P Global Ratings). This has opened the way for successful operation of Korean Re Switzerland, which got off the ground in June 2019.
S&P Global Ratings assigned the ‘A’ rating to Korean Re Switzerland with the stable outlook on June 28, 2019 and said that it viewed the Swiss entity as a core subsidiary of Korean Re, which is expected to play a critical role for the parent group to expand it reinsurance business in Europe.
With the rating announcement, S&P Global Ratings said that Korean Re Switzerland is set to receive strong support from the group in operations, underwriting, reinsurance and risk management. The rating agency also shared a view that the Swiss subsidiary is fully integrated with the group in terms of operations and is integral for the group’s strategy to grow its overseas business.
The ‘A’ rating means a great deal to Korean Re Switzerland because a good credit rating is one of the most important elements for a new entity in attracting profitable business.
Korean Re welcomed the news that its Swiss subsidiary obtained the ‘A’ rating. CEO Jong-Gyu Won of Korean Re said, “It is definitely great news, which heralds a good start for Korean Re Switzerland. I expect our new entity to become a major hub that brings growth to our international business.”
Korean Re plans to increase the portion of its overseas business to 80 percent by 2050 under Vision 2050, which was announced in 2014. Currently, Korean Re’s overseas business accounts for 24.7 percent of its total revenue (gross written premiums), and no other domestic financial company in Korea beats that figure. This clearly reflects Korean Re’s strong commitment to growing its overseas business based on the recognition that expanding into the global market is not a matter of choice but a matter of survival.
Indeed, Korean Re has made great strides in expanding its global presence.
In 2015, it entered the Lloyd’s market in London – a global insurance hub by establishing Korean Re Underwriting Ltd. It also opened a branch in Labuan, Malaysia in 2017 and a branch in Dubai, the UAE in 2018. Most recently, Korean Re Switzerland started operations in June 2019, with the aim of expanding Korean Re’s presence in Europe – the world’s second largest single insurance market after the United States.