President Won Jong-kyu of Korea Reinsurance 

Corp.(Korean Re).(photo courtesy of Korean Re)

Korean Re rose to 9th place in the global reinsurance market with gross written premiums of $5.1 billion in FY 2012. It moved up one notch from 10th in FY 2011 in the ranking of the global top 50 reinsurers recently released by A.M. Best, the leading ratings agency for the insurance industry. 

Overtaking Partner Re of Germany by more than $400 million in gross written premiums, the Korean reinsurer secured a single-digit global ranking for the first time in its corporate history. This followed its achievement last year when it became the first local financial institution to rank among the world’s top 10 players. 

Munich Re held onto its top slot ahead of Swiss Re for four straight years, while Toa Re of Japan took 19th place. It is noteworthy that Korean Re climbed up 23 spots in the span of only 14 years from 32nd in FY 1998.

The announcement this time again reconfirmed Korean Re’s continuous progress in its operations in the global reinsurance market both at home and abroad.

The fact that Korean Re rose continuously in the global rankings is owed to its accumulated know-how over the past half century of reinsurance business operation.

The reinsurance firm strengthened its domestic position by developing new products, improving customer service, and exploring new markets with an average growth rate of 12 percent annually since 1998, managing risks in the most appropriate way based on scientific and systematic analysis of market conditions.

Consequently, Korean Re has been able to maintain its S&P credit rating of A and an A.M. Best rating of A- for the past several years by sustaining its sound growth, while many reinsurance firms suffered from financial losses due to the various natural disasters like hurricanes and floods that swept the world.

The rise in its global rankings this time would give Korean Re a huge boost in its global operations in the global reinsurance market as it aims to collect 4.5 trillion won in reinsurance premiums and record an after-tax operating profit of 135 billion won this year to solidify its position in the global reinsurance market. The current fiscal year runs from April to December due to changes in the fiscal year period this year.

Since the inauguration of President Won Jong-kyu in June, Korean Re’s growth has experienced a big momentum surge, rising rapidly. President Won set the ideal for management as “Challenging Super-First Class Reinsurance Firm, Realizing Creative Value, and Fostering Global Talent,” to strengthen Korean Re’s professionalism as a global player, leading changes in Korean Re under his leadership.

Korean Re has not been satisfied with its current position of being No. 1 in Asia and 9th in global rankings with over 20 percent of its revenue coming from overseas. It’s goal is to become a true world-class player counting on its operational know-how and experience going back for a half century. For fiscal year 2012, Korean Re’s income from overseas accounted for 22.6 percent of 1.27 trillion won.

At the IIS 49th annual seminar held from June 16-19, CEO Won gave a presentation on ‘Natural Catastrophes: Higher Frequency and Greater Volatility.’ He provided an analysis of natural disasters taking place throughout the world and their impacts on the global insurance industry. 

He said the recent natural catastrophic events have presented four key lessons for the insurance industry. First, insurers should enhance their underwriting performance within their maximum capacity and in consideration of aggregate risk. Second, when it comes to pricing, insurers need to thoroughly evaluate risk exposure instead of simply relying on the past data on losses. Predicting and measuring risk exposure accurately is the most important aspect of underwriting. Third, it is critical to implement flexible underwriting policies in line with the cycles of market hardening and softening while working to implement a business strategy that prepares one for a worst-case scenario. He emphasized that things can be “worse than the worst.”