Korea has set the year 2012 as the year to become a world class reinsurer, a top executive of the reinsurance company said.
Noting that Korea Re is now included in the list of the world's top 10 reinsurers, Park Jong-won, CEO of the reinsurance company, said, "We are not satisfied with the current position. Therefore, we have set 2012, the year of dragon, as the year to join the ranks of the global top five."
"In addition to this, we have set four ambitious targets for 2012 - strengthening of global competitiveness, securing domestic business base, establishment of corporate infrastructure, and continuous corporate culture reform," he said.
In an interview with Korea IT Times, Park said, "As a means of strengthening global competitiveness, we will push for active influence of unchartered overseas markets by securing business accounts through existing overseas business networks, including Lloyd's, Toa, and China.
"At the same time, we will diversify lines of overseas inward businesses to include off-shore energy and casualty," said the CEO.
"To explore new overseas markets, we will gradually expand our overseas branches from Asia to Europe, the Middle East and North America, while increasing overseas businesses through consumer word of mouth. As we exchange business ideas, we also exchange global ideas and thought," said Park.
In order to tighten monitoring of retained risks, Korean Re will also strengthen the work processes of overseas inward business, including overseas research-risk survey-writing functions, and increase management of accumulated domestic and foreign natural catastrophe losses, the top executive said.
Establishment of a Domestic Business Base
"To secure a domestic business base, Korea will make an anticipated response to market and regulate changes by uncovering and controlling the underlying risks of business operations, while making timely and thorough evaluation of any external system changes, which threaten the business environment," said Park.
As a means of creating new profit engines, he continued, Korea Re will develop new personal insurance products to keep up with changing market circumstances such as aging and low-birth rates and increase portion of profitable non-proportional and facultative reinsurance business.
The CEO said that Korean Re will provide customized services through constant communication with business counterparts as a means of innovating customer service.
To Stress the importance of establishing a corporate infrastructure, CEO Park said, "To attain this goal, we will establish a next generation IT system, build future-oriented organizational structures, and cultivate global reinsurance professionals.
"First of all, we will encourage active employee participation in the construction of this optimum-efficiency system and build a system, which accurately reflects the needs of each department through continuous communication. In addition, we will form flexible, efficient and professional organizations which are suitable for the rapidly-evolving business environment. We will also recruit research professionals and cultivate overseas reinsurance experts through regular stationing of overseas business staff in their respective regions."
Noting that Korean Re will make a strong push for continuation of corporate culture reform, he said, "We will encourage our employees to have passion and a challenge-oriented spirit. Our model employees should have the following three factors - healthy physique, virtue and intelligence.
"In addition to exceptional employees, all executives and employees should become a role model and communicate with an open mind to fellow co-workers and solidify responsible management by fostering a sense of responsibility. This idea should be in the minds of each employee and should be incorporated at the workplace from the beginning to the end of the day.”
Overseas Business trategy
Asked about the strategy to expand overseas business, CEO Park said, "Our companies’ overseas inward premiums are expected to exceed KRW 1 trillion or 20 percent of total sales in the fiscal year of 2011. Gross premiums have expanded from KRW 672.3 trillion in 2007 to KRW 820.9 trillion in 2009 and further to KRW 700.1 trillion in as of the end of November 2011."
He said that Korean Re plans to increase its business in China and achieve an annual average sales growth of 22.5 percent from USD 160 million in 2011 to USD 200 million in 2012 and increase to USD 360 million in 2015.
"To achieve this, we will meet the reinsurance demand of some 20 regional and government-owned companies in China, while pursuing the transfer of Beijing liaison office into a branch," he explained.
In an effort to expand the overseas market hubs, Park said, "Korean Re will change the Dubai Liaison Office into a branch and the London Liaison Office into a local entity and will soon penetrate the African market. They will also acquire large and high quality global accounts through the London entity. It will also establish a Shanghai & Miami Liaison Office, to increase presence in China to expand business volume and enlarge P/F from Middle and South American markets."
For exploration of new overseas markets, he said that Korean Re will start business relations in emerging markets such as Russia and the CIS region. They will also expand business in the unchartered parts of the U.S. and Canada, and penetrate the overseas cooperatives’ market through new product development.
"Through the conclusion of business tie-up with China Re and Toa Re & Lloyd's, we will enhance business cooperation on reinsurance placement and the exchange of market information with them," he added.
Vision and management strategy
Commenting that Korean Re, (11th in the world), hopes to become the 8th reinsurer in the world by the end of 2015, Park said. "In line with this, we will attain KRW 5.1 trillion in gross premiums in 2011 and expand the portion of overseas business from 20 percent in 2011 to 30 percent in 2015, and increase to 50 percent in 2020.
"Korean Re aims to upgrade its ranking in the world from 10th in 2011 to 8th in 2015 and up to number five in 2020 with gross premiums soaring from KRW 5.1 trillion to 8.0 trillion and further to 15 trillion, respectively."
As part of its efforts to become global top class reinsurer, Korean Re will expand its overseas business by entering unchartered regions and increasing business volume in the Chinese reinsurance market. It will also seek joint underwriting of businesses with domestic insurers, while strengthening overseas business units. This includes domestic & overseas risks survey functions, as well as cultivate overseas business professionals through on-the-job training (OJT) programs at liaison offices and foreign institutions.
In a strategy to explore domestic business markets, Park said, it will develop diverse niche markets, expand the portion of life reinsurance business from the present 15 percent of the entire P/F to 30 percent in 2020, and create reinsurance demand in prospective areas such as medical insurance. Korean Re will go all-out to create the reinsurance demand through support of government insurance and develop reinsurance products in line with rapidly changing market circumstances, he explained.
Mt. Everest expedition
All the employees of Korean Re completed the Mt. Baekdu range traverse during the 2004-2009 period, finishing the 300km climb of the peaks above the 1000m range amongst the entire 670km course located in South Korea, and started on the reverse trek in 2010.
"In 2011, all employees completed the reverse course of Mt. Odae. For the first time, four foreign business counterparts took part in the Korean Re’s unique corporate culture," said CEO Park.
For the task of climbing Mt. Everest; it is planned from April 2012, Park said, "It is designed to commemorate the successful completion of the Mt. Baekdu range traverse to celebrate that 2012 is the base year to leap to become a world class reinsurer and instill the challenge-oriented spirit of Korean Re’s ambition to become a force in the global arena." Sixteen employees from all levels chosen by strict evaluation of applicants will participate in the Mt. Everest expedition.