Review of Operations

Note: This section covers business results for the head office only, with gross written premiums used to measure business volume and the combined ratio calculated under IFRS 4.

The Korean property insurance market experienced modest growth in 2024, with stable premium increases and favorable loss trends. The loss ratio of the market stood at 55.4% as of November 2024, primarily due to fewer natural disasters and a reduction in large losses. Gross written premiums rose by 2.9% year over year to KRW 2,670 billion. By line of business, the fire insurance market grew by 8.4%, reaching KRW 314 billion in premium income, while the comprehensive insurance market saw a 2.2% year-over-year increase, totaling KRW 2,356 billion as of November 2024.

Treaty Business

We operate private treaties with 16 ceding insurers, and our premium income from these treaties increased by 6.8% to KRW 180 billion. Our domestic property treaty business consists of approximately 95% tariff rate-based contracts and 5% Korean Re rate-based contracts.

Since UY2023, we have continuously strengthened our underwriting review during treaty renewals. To mitigate adverse selection by ceding insurers, we have renewed variable quota share (Q/S) treaties with a narrower cession range. Additionally, we remain committed to structural improvements, including lowering treaty commission rates and imposing a loss participation clause (LPC) to enhance profitability.

Building on our stable performance in 2024, we have continued to ensure treaty profitability by maintaining strict underwriting discipline and resisting pressure to loosen treaty terms and conditions (T&Cs) during 2025 renewals. This will help us maintain stability in our business performance in the year ahead.

Facultative Business

Our premium income from the domestic property facultative business increased slightly by 0.6% to KRW 457 billion, as we prioritized selective underwriting and maintained a prudent approach to writing profitable accounts.

Korean Re’s facultative business has been focusing on underwriting mega-sized accounts in a reinsurer-driven market since the widespread adoption of judgment rates in 2019. Mega-sized accounts provide reinsurers with sufficient payback opportunities, as improved policy terms follow large-loss occurrences. As a result, our facultative business currently is comprised of approximately 80% mega-sized accounts, defined as total sum insured (TSI) above KRW 1 trillion, and 20% small and medium-sized (SME) accounts.

On the other hand, SME accounts are characterized by intense rate competition and an insured-driven market. Given these conditions, we strive to selectively underwrite SME accounts that have shown stable performance with adequate premiums.

In 2025, the domestic property insurance market is expected to soften further, driven by improved market performance and an influx of overseas reinsurance capacity. While maintaining a profitability-focused underwriting stance in our facultative business, we will seek growth opportunities through our treaty business, leveraging our established relationships with ceding insurers to secure facultative placements.