Korean Re has released its results for H1 2022, saying that it saw gross written premiums (GWP) go up by 10% in the first half of the year.
The firm said in a statement that GWP had risen to KRW 4,586.4bn ($3,797.5m) and was driven by new coinsurance business. This new business, it said, led to domestic personal lines to expand by 16.4%. The firm signed a coinsurance agreement with Shinhan Life in March of this year.
The agreement between the two firms will see Korean Re work with Shinhan Life to help the latter manage its assets and liabilities. According to Korean Re, the deal would lead to individual transactions collectively worth up to KRW 500 billion ($414m).
Korean Re said about its latest results: “Excluding coinsurance transactions, we achieved a 4.4% increase in premiums from domestic personal lines as long-term and motor businesses continued to grow. A robust increase in premiums from overseas business also boosted overall top-line growth, supported by ongoing market hardening. Although our overseas life business shrank due to portfolio adjustment, we saw our international P&C business grow strongly in the current favourable rating environment.”
It added: “For the six months ending June 30, 2022, we delivered KRW 67bn ($55.4bn) in net income, down 44.3% compared to the same period of the previous year. The deterioration in profit was attributable to weaker underwriting results of our overseas business amid growing COVID-19 losses, coupled with natural catastrophe losses. We reported a combined ratio of 100.2%, up 2.1%p year on year, with the ratio for overseas business rising to 107.4%.”
It went on: “On the other hand, domestic commercial business continued to record underwriting profit, generating an improved combined ratio of 84.1%. This higher underwriting profitability was backed by upward pricing trends in most commercial lines of business and fewer large-loss events in Korea. Our domestic personal lines of business also improved to a combined ratio of 100.5% from 101.9% a year earlier as we withdrew from poorly performing contracts.”
Korean Re said it had achieved stable investment results in first half of 2022, which it said followed strong growth in invested assets. Investment gains, said Korean Re, amounted to KRW 113bn ($93.5m) in that time. Total invested assets rose by 17.2% due to coinsurance transactions and the issuance of hybrid capital securities.
The firm also said it had also seen gains on the sale of bonds decrease but managed to yield solid returns on alternative investments. Our alternative investment portfolio consists mostly of high-quality assets that generate stable cash flows. It also said it had posted an investment yield of 3.1% in H1 2022 in spite of increased market volatility.
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