Motor

In 2024, the Korean motor insurance market experienced subdued growth compared to the previous year. Despite an increase in the number of registered vehicles, overall premium volume declined due to the third consecutive year of premium rate reductions.

Since the onset of COVID-19, the motor insurance sector has benefited from improved loss ratios and higher profitability. Following several years of significant improvement, premium rates have been continuously reduced since 2022, leading to a gradual increase in loss ratios. In 2024, the market-wide loss ratio is expected to rise by an additional 3%p compared to the previous year. However, Korean Re successfully managed to lower its loss ratio by 0.5%p to 79.6% in 2024. While primary insurers faced deteriorating performance, the reinsurance loss ratio remained stable due to a decline in accident severity and the absence of major natural catastrophe events.

In terms of top-line performance, Korean Re recorded negative growth, with gross written premiums declining to KRW 245.9 billion in 2024. This was primarily driven by the termination of certain proportional treaties, reflecting a reduced appetite among primary insurers for quota share reinsurance following the implementation of IFRS 17. In response, we have focused on offering reinsurance solutions that better meet the needs of ceding insurers. Additionally, we have expanded existing programs covering higher-risk exposures.

Looking ahead, the Korean motor insurance market is likely to face ongoing challenges in 2025, with direct premiums expected to stay close to KRW 21 trillion. While the growing number of high-value vehicles could help drive premium growth, the market is still dealing with continued premium rate cuts. These reductions are part of government efforts to ease the financial burden on consumers amid persistent inflation and high interest rates. As a result, the loss ratio is expected to increase further due to lower premium levels
and inflationary pressures.

Under these tough market conditions, Korean Re has set a gross written premium target of KRW 257 billion for its domestic motor business in 2025. This marks a 4.3% increase from the previous year, aligning with the growth of mutual associations. To achieve this target, we will continue to develop innovative reinsurance programs and strengthen our partnerships with primary insurers. Our focus remains on driving sustainable growth while delivering value to both our partners and our company.

Surety & Credit

Korea’s GDP growth initially showed sluggish performance in 2024 due to global semiconductor downturns and a contraction in private consumption caused by high interest rates and inflation. For the whole year, the GDP growth rate increased from 1.4% to 2.0% year on year, supported by recovery in exports and domestic consumption despite global economic uncertainties.

The Bank of Korea’s interest rate decreased from 3.5% in the previous year to 3.0% in 2024. The interest rate cuts in 2024 were mainly driven by efforts to stimulate economic growth and counteract the effects of a slowing economy.

While the primary surety and credit insurance market continued its growth trend, there was a shift in loss experience. During the COVID-19 pandemic, loss ratios dropped to a historically low level in an environment characterized by low interest rates. However, under the current higher interest rate conditions, there has been a noticeable increase in loss ratios, particularly in the consumer product sector.

In 2024, our gross written premiums for surety and credit insurance grew by 6.5% compared to the previous year, aligning with the growth observed in the primary market. However, we experienced a considerable increase in loss ratios compared to the last three years. In particular, the credit insurance loss ratio, which had benefited from the lower interest rate environment during the COVID-19 pandemic, showed a slightly higher rate of increase compared to the surety insurance loss ratio.

Agriculture

Korean Re has been a reliable source of reinsurance capacity for the domestic agricultural industry. It is essential for farmers to have insurance coverage against natural catastrophes in order to maintain their business stability, and we have played a crucial part in promoting the local agricultural insurance market. Apart from utilizing our own capacity, we have also provided access to global reinsurance capacity to support the development of the local market.

The domestic crop insurance market continued its growth trajectory in 2024, with original gross premiums increasing by 12% to KRW 1,051 billion. The livestock insurance market experienced a modest rebound, with its premiums increasing to KRW 214 billion in 2024. Our business volume in domestic crop decreased due to stringent underwriting, generating gross written premiums of KRW 101.2 billion from crop insurance and KRW 98.6 billion from livestock insurance.

In 2024, the crop insurance market recorded a higher loss ratio of 84.4% compared to the previous year due to atypical losses such as rice crop infestations during the growing season and heavy snowfall at the end of November. Nevertheless, the adverse impact on overall performance was mitigated by structural improvements implemented in 2021, including the transfer of high-risk perils such as spring frost to the government, as well as an improved profit and loss distribution structure. Meanwhile, the livestock insurance market went through a rough patch with multiple shed fires, a prolonged heatwave, and heavy snowfall driving the loss ratio to 112.2%.

The agricultural machinery insurance market grew by 7% compared to the previous year, resulting in gross written premiums of KRW 38.6 billion in 2024. After years of continued losses, the market started to turn around noticeably in 2020 and has since delivered favorable results, driven by the standardization of loss adjustment manuals and the implementation of strict underwriting guidelines. Benefiting from this market trend, we achieved a loss ratio of 77.9% in 2024 – higher than the previous year but still at a favorable level.

The natural perils insurance market has stabilized in scale following a period of rapid growth up to 2023. Alongside crop and livestock insurance, our profitability-focused underwriting strategy led to a slight decline in gross written premiums, which fell to KRW 27.7 billion compared to the previous year.

The heavy snowfall in November had the most significant impact on the natural perils insurance market, resulting in total incurred losses of KRW 74.2 billion. However, due to our prudent underwriting focus on high-quality treaties, we successfully limited our losses to below KRW 20 billion, achieving a loss ratio of 92.9%.

Since 2020, continuous underwriting reinforcement has helped us turn around our overseas agriculture business, leading to profitability in 2023. In 2024, we recorded another profitable year, with a loss ratio of 36.4%, although gross written premiums decreased to KRW 4.3 billion. This improvement resulted not only from the reduced impact of past run-off contracts but also from our profitability-oriented portfolio management strategy.

In 2025, in the face of uncertainties posed by climate change that affects our business worldwide, we will continue our efforts to build a more diversified and profitable portfolio, with the aim of improving the bottom line of our business. As a major capacity provider of the domestic agriculture market, we will not waver from our commitment to promoting the growth of the government-sponsored agricultural insurance market, recognizing its role in both market stability and our long-term business expansion. For our overseas business, we will continue to prioritize portfolio management, emphasizing profitability over top-line growth through selective underwriting.