LONG-TERM

In 2019, the long-term insurance market in Korea grew by 5.0% in terms of direct premiums. This was led by persistently rapid growth of long-term personal accident (PA) and disease insurance products. Savings-type insurance sales suffered a slowdown due to stricter requirements for tax benefits and the upcoming rollout of IFRS17. Frequent fires in winter for some years and a massive wildfire occurred in the country’s northeastern region in April last year, drawing more attention to long-term property insurance.

Korean Re’s written premium in long-term business reached KRW 2,277.7 billion in 2019, up 12.2% year on year, while the combined ratio before management expense increased by 1.3%p to 100.6%. Even though we strategically co-developed new products with direct insurers to write more profitable risks, the combined ratio was deteriorated due to the rising loss ratio of medical indemnity products.

The long-term insurance business in 2020 is expected to show a similar pattern of growth in direct premiums, and that will be driven by a greater focus on new business from PA and disease products as well as a potential hike in medical expense insurance rates. More specifically, competition in developing new products targeting the elderly or people with chronic or pre-existing conditions, and ensuing sales and marketing to increase new business, will become more intensified among direct insurers.

To support the long-term insurance industry, Korean Re intends to provide its analytical research of domestic and global trends for product development, underwriting services, and reinsurance programs. With these efforts, we are seeking a proper level of growth in premium volume and profits, thus strengthening our reinsurance portfolio.