AGRICULTURE AND OTHER SPECIALTY LINES

In 2019, the primary agriculture insurance market continued to expand. In terms of gross written premiums, our crop business increased by 90.7%, to KRW 333.1 billion, while the livestock business increased by 50.9%, to KRW 94.7 billion.

However, our profitability deteriorated as the loss ratio of crop insurance soared to 195% in the wake of spring frost and several typhoons. Meanwhile, we managed to minimize our retained loss ratio to 110% due to the government’s loss sharing and stop loss protection. On the other hand, our livestock insurance business substantially recovered from the costly previous year on the back of the improved original rate and strengthened loss assessment and underwriting guidelines. Without suffering severe damage from heatwaves, our livestock loss ratio decreased to 79%.

After a few years of rapid expansion, our overseas agriculture business moved into a stable growth phase in 2019. Premium income for the year moderately climbed to KRW 114.0 billion, up 2.7%. Highly frequent natural catastrophes across the globe, such as torrential rainfalls in India and typhoons and the African Swine Fever outbreak in China, resulted in the worst-ever loss ratio of 82% since we started our inward business. Surrounded by unfavorable conditions, however, we made our way into two new markets-Italy and Turkey-and our efforts towards geographical diversification will continue further for stable growth going forward.

In 2019, the primary market for natural perils insurance contracted due to sluggish sales, which adversely affected the growth of this line of business. Furthermore, three big typhoons (Lingling, Tapah and Mitag) drove our loss ratio up to 84% for the year.

Korean Re has successfully led the domestic reinsurance market for crop, livestock, and natural perils insurance by exclusively providing local insurers with access to ample capacity in the global reinsurance market. As a reliable provider of reinsurance capacity, we have contributed to market development for government-sponsored insurance.