Korean Re suffers Q1 profit slip as foreign units clip successes at home

Korean Re suffered a slight decline in first quarter underwriting profits even as the group upped its top line by a notable 15%, as losses hit foreign operations, the group said in a trading statement to Q1 results.

“The deterioration in profit was attributable to weaker underwriting results of our overseas business amid growing COVID-19 losses coupled with natural catastrophe losses,” management said.

The group's combined ratio rose a mild 0.1 percentage point to 98.7%, with a spike on foreign operations to 103.6% more than masking what management calls a “striking improvement” in the domestic commercial business, where the combined ratio fell 77.9% from 87.9%. Management credited favourable pricing trends and fewer large-loss events in Korea.

Gross written premiums of ₩2.28 trillion ($1.84 billion) was up 15% on the prior year period and the net written sum after reinsurance rose an even stronger 20.4%.

Growth was “driven mostly” by new coinsurance business which led domestic personal lines to a 28% top-line gain.

Foreign P&C also contributed thanks to strong rate trends, management said. Foreign life insurance continued to sag on portfolio adjustment.

By the bottom line after investment earnings roughly flat to the prior year period but a higher apparent hit from tax or non-operating income, net profits were down 17% year on year or nearly ₩10 billion to ₩46.9 billion.

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