Korean Re New Year's Concert 2024

Korean Re hosted a new year's event on January 4, 2024. Employees and their families got together to celebrate the 10th anniversary of the New Year's Concert, which featured a program in two parts. For the first part of the event, the audience watched a video montage of Korean Re's achievements and successes and listened to a welcoming address from CEO Jong-Gyu Won. New joiners were also introduced and welcomed to the company with a warm applause. The audience also watched a video recap illustrating 10 years of the New Year's concerts.

In his welcoming address, CEO Jong-Gyu Won expressed his heartfelt appreciation to employees, saying that thanks to their hard work and dedication, Korean Re was able to achieve such great results last year. He also gave best wishes to the new joiners, hoping that they would grow into reinsurance experts in the future.

After dinner was served, the second part of the event began, with guests being guided to a concert hall. Conductor Si-Yeon Sung and Seoul Philharmonic Orchestra performed Tchaikovsky's Italian Capriccio and Dvorak's Symphony No. 8. Violinist In-Mo Yang, who is hailed as "Korea's Paganini of the 21st century", played Sarasate's Zigeunerweisen and Ravel's Tzigane. The melodic richness and rhythmic vitality of the classical pieces filled the concert hall, captivating the audience.

Over the last 10 years, it has been Korean Re's tradition to hold a classical music concert at the beginning of a new year, inviting its clients, partners, employees, and their family members to the event in celebration of the new year. Korean Re will continue this tradition, demonstrating its commitment to engaging with its members.

Korean Re's Business Results for 2023

Korean Re reported KRW 287.5 billion in net income for 2023, with an operating income of KRW 365.2 billion. Starting from January 2023, Korean Re is reporting its financial results on the basis of new accounting standards, IFRS 17 and IFRS 9.

Although we were hit by fire losses at Hankook Tire and losses from the Turkey earthquake, there was some improvement in the business performance of some commercial lines of business, such as property, marine, and motor. We continued to seek profit-oriented growth based on strengthened underwriting guidelines and stable asset management.

*The above figures are based on the company's separate financial statements under IFRS 17.

We saw our revenue decrease by 15.5% to KRW 6,856.1 billion in 2023 compared to KRW 8,111.3 billion in 2022. The decline arose partly from a reduction in gross written premiums from long-term insurance due to the clean-cut of some poorly performing contracts.

In terms of gross written premiums (IFRS 4), we recorded a smaller decline of 13.8%, with total premiums reaching KRW 8,383.1 billion in 2023. Premiums from domestic commercial lines of business decreased by 1.3% due to portfolio modification, which involved reducing underperforming businesses such as cellphones and personal accidents. Domestic personal lines of business declined by 29.8% mostly because of the clean-cut of low-margin long-term bulk treaties worth KRW 1.5 trillion. On the other hand, we reported a 7% increase in premiums from overseas business, supported by ongoing market hardening. This robust growth significantly increased the portion of our overseas business.

The decrease in revenue was attributable in part to the application of IFRS 17 and IFRS 9. One of the major changes in the income statement based on IFRS 17 is the recognition of revenue on an accrual basis not on a cash basis, which allows revenue to reflect the services provided and exclude deposits. This may result in a substantial decrease in revenue from long-term contracts as revenue is recognized over the coverage period.

1) Comprehensive : Crop & Livestock included
2) Etc : Nuclear included
3) Mixed : More than 2 coverages
4) Life : Coinsurance & Overseas life included

Moreover, non-distinct investment components are excluded from the insurance P&L under IFRS 17. This may have a negative impact on the insurance contract revenue for certain lines of business.

Under IFRS 9, a new approach is applied to the classification of financial assets. It is also worth noting that under IFRS 17, foreign currency exchange gains and losses on insurance contract liabilities are reclassified from the insurance profit and loss (P&L) to insurance finance income & expenses, which is a sub-item of the investment P&L.

There are also changes in accounting for reinsurance commissions. Fixed reinsurance commissions whose amounts are determined regardless of whether or not an insured event occurs are deducted from insurance revenue, resulting in a reduced appearance of the revenue volume. Previously they were treated as a business expense for the current period under IFRS 4. Variable reinsurance commissions were also treated in the same way under IFRS 4, but they are now recognized as part of claims under IFRS 17. Both business expenses and claims are recognized in profit or loss, so there is only a classification impact with no effect on net income.

Meanwhile, Korean Re has remained committed to returning value to shareholders based on its consistent dividend policy to offer attractive and sustainable returns to shareholders. Its total dividend payout was KRW 79.5 billion in 2023, with the payout ratio slightly increasing to 30.4%. This translates into a dividend yield of 6.8% and a dividend per share of KRW 540, one of its highest levels in history.

*The above figures are based on the company's separate financial statements under IFRS 4.