Korean Re's focus on profitable lines boosts outlook

It’s operating performance remains adequate, with an ROE of 9.5%.

Korean Reinsurance Company’s (KRE) improved risk-adjusted capitalisation — driven by hybrid bond issuance, profit retention, and reduced underwriting risk from portfolio restructuring — is expected to remain stable over the medium term, AM Best said.

KRE’s balance sheet strength is further supported by well-matched asset and liability management, conservative investment strategies, and access to capital markets.  

Operating performance remains adequate, with AM Best calculating a 9.5% return-on-equity and a 95.5% non-life combined ratio in 2023. 

The discontinuation of underperforming domestic treaties is expected to improve profit fundamentals, whilst overseas performance has been impacted by high-severity natural catastrophe losses. 

KRE’s efforts to reduce its exposure to catastrophe property risks abroad and expand into non-catastrophe segments such as casualty and specialty lines are anticipated to strengthen future profitability.  

AM Best expects KRE’s dominant position as South Korea’s only local reinsurer to remain secure despite growing competition, supported by its role in the expanding domestic coinsurance market.

Overseas operations now account for over a third of gross insurance service revenue, providing diversification and gradual growth.  

The outlook reflects AM Best’s expectations that KRE will maintain stable capitalisation and continue its shift toward more profitable underwriting practices.