Korean Re has set the year 2012 as the base year to become a world class reinsurer, a top executive of the reinsurance company said.
Korean Re is currently ranked as the world's 11th reinsurer in terms of net written premiums. Park Jong-won, CEO of the reinsurance company, stated, "We are not satisfied with our current status. Therefore, we have set 2012, the year of dragon, as the base year to join the ranks of a world class reinsurer.”
"In addition to this goal, we have set four targets for 2012 - strengthening of global competitiveness, securing a domestic business base, establishment of corporate infrastructure and continuous corporate culture reform.”
In an interview with Korea IT Times, Park said, "As a means of strengthening global competitiveness, we will push for active penetration of unchartered overseas markets by securing business accounts through existing overseas business networks, including Lloyd's, Toa Re and China Re.
"At the same time, we will diversify lines of overseas business 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 business through the people network as well as business exchange with worldwide business partners," said Park.
In order to tighten monitoring of retained risks, Korean Re will also strengthen the work processes of overseas businesses, including overseas research-risk survey-underwriting functions, and increase management of accumulated domestic and foreign natural catastrophe losses, the top executive said.
Establishment of a Domestic Business Base
As a means of creating new profit engines, Korean Re will develop new personal insurance products to keep up with changing market circumstances such as aging and low-birth rates. In addition, Korean Re will increase a share 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 improving customer service.
To Stress the importance of establishing corporate infrastructure, CEO Park stated, "To attain this goal, we will establish a next generation IT system, build future-oriented organizational structure, and cultivate global reinsurance professionals.
"First of all, we will pursue active employee participation in the construction of this optimum-efficiency system and build a structure which accurately reflects the needs of each department through continuous communication. In addition, we will form a flexible, efficient and professional organization suitable for the rapidly-evolving business environment, while recruiting research professionals and cultivating overseas reinsurance experts through regular stationing of overseas business staff in their respective regions."
Park noted that Korean Re will make a strong push for continuation of corporate culture reform. "We will encourage our employees to have passion and a challenge-oriented spirit. Ideal employees should have the following three factors - healthy physique, virtue and intelligence.
"Along with this, all executives and employees should become a role model, communicate with an open mind to fellow co-workers and solidify responsible management by fostering a sense of responsibility, which follows each task through to the very end."
Overseas Business Strategy
When asked about the strategy to expand overseas business, CEO Park said, "The overseas premiums of our corporations are expected to exceed KRW 1 trillion (20 percent of total sales) in the year 2011. Gross premiums expanded from KRW 672.3 billion in 2007 to KRW 820.9 billion in 2009 and increased to KRW 700.1 billion at 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. They hope to increase from the previous year, USD 160 million to USD 200 million in 2012 and to USD 360 million in 2015.
"We will meet the reinsurance demand of some 20 regional and government-owned companies in China, while pursuing the transfer of the Beijing office into a branch," he explained.
In an effort to expand overseas market hubs, Park stated, "Korean Re will change the Dubai Office into a branch and the London Office into a local entity. They also intend to create an African market, as well as acquire large and high quality global accounts through the London entity. It will also establish a Shanghai & Miami Office, 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. This includes expanding business in the unchartered parts of the U.S. and Canada and creating the overseas cooperatives’ market through new product development.
"Through business tie-ups with China Re, Toa Re, & Lloyd's, we will enhance business cooperation on reinsurance placement and exchange of market information with them.”
Vision and Management Strategy
Korean Re now ranks 11th globally, but hopes to become the 8th reinsurer by the end of 2015. Park stated, "In line with this, we will attain KRW 5.1 trillion in gross premiums in 2011. We will also expand overseas business from 20 percent in 2011 to 30 percent in 2015 and furthermore to 50 percent in 2020.
"Korean Re aims to upgrade its ranking in the world to 8th in 2015 and to 5th in 2020, with gross premiums soaring to 8.0 trillion and further to 15 trillion, respectively."
As part of its efforts to become a superior global insurer, Korean Re will expand its overseas business by entering unchartered regions and increase business volume in the Chinese reinsurance market. It will also seek joint underwriting of businesses with domestic insurers and strengthen overseas business units as well as domestic & overseas risk survey functions. Additionally, it will cultivate overseas business professionals through on-the-job training (OJT) programs at local offices and foreign institutions.
In a strategy to explore domestic business markets, Park said, it will develop diverse niche markets, expand the shares of life reinsurance business from the present 15 percent of entire P/F to 30 percent in 2020, and create reinsurance demand in prospective arenas such as medical insurance. Korean Re will spare no expense to create reinsurance demand through the support of government insurance and develop reinsurance products in line with rapidly changing market circumstances, he explained.
Mt. Everest Expedition
"In 2011, all employees completed the reverse course of Mt. Odae. For the first time, four foreign business counterparts participated in Korean Re’s unique corporate culture," said Park.
As part of Korean Re's unique corporate culture, we completed the Baekdu Mountain Range Traverse in 2009, and have started on the reverse traverse in 2010. In 2012, we have set our sights to face and conquer a bigger mountain, Mt. Everest.
The Mt. Everest expedition is a significant event planned for April 2012. Park stated, "It is designed to commemorate the successful completion of the Mt. Baekdu range traverse on the occasion that 2012 is the base year to leap to become a world class reinsurer. This will aid in instilling the challenge-oriented spirit of Korean Re’s ambition to become a force in the global arena." Sixteen employees from all levels were chosen by strict evaluation of applicants will participate in the Mt. Everest expedition in the upcoming spring.
