As a reliable provider of reinsurance capacity, Korean Re has continued to support the domestic farming industry. Insurance coverage for farmers against natural perils is crucial to ensuring their business stability, and Korean Re plays a key role in helping develop the local agricultural insurance market not only by deploying its own capacity but also by providing access to global reinsurance capacity.

The domestic crop insurance market continued to grow robustly in 2021, with original gross premiums increasing by 14% year on year to KRW 778 billion. The livestock insurance market also experienced steady growth, and its premiums reached KRW 232 billion in 2021. Korean Re’s business remained more or less stable, generating gross written premiums of KRW 225.6 billion from crop insurance and KRW 121.4 billion from livestock insurance.

In terms of profitability and sustainability of the crop insurance market, 2021 was a turning point due to improvements in scheme and reduced losses from natural disasters. The loss ratio of the crop insurance market drastically improved to 59% in 2021, as the insurance scheme was revised to transfer major perils, such as spring frost, to the government and improve the profit-loss distribution method. The livestock insurance market also continued to perform fairly well, with the loss ratio further falling to 68%. This was driven by strengthened loss assessment and underwriting guidelines, improved pricing, and smaller heatwave losses.

The agricultural machinery insurance market showed continuous growth on the back of an increase in sales, which helped us boost our gross written premiums by 12% to around KRW 35 billion in 2021. After years of continued losses, the market started to turn around noticeably in 2020, producing favorable results thanks to the standardization of loss adjustment manuals and the application of strict underwriting guidelines. As a result, our loss ratio was pushed down to an all-time low of 54% in 2021.

The natural perils insurance market achieved a 7% growth in 2021, supported by effective sales strategies and growing demand for coverage against natural perils. This led to a growth in our gross written premiums from natural perils insurance to KRW 24.5 billion.

Despite heavy rain in the summer and two typhoons affecting the Korean Peninsula in 2021, their collective impact on the natural perils insurance market was limited, allowing us to deliver a loss ratio of 39%. Specifically, Typhoons Omais and Chanthu brought losses of KRW 1.1 billion to the natural perils treaty, which was only 8% of typhoon losses in 2020.

In 2021, our overseas agriculture business hit a sticky patch because we continued to struggle with loss creep from 2019. The impact of global climate change also undermined our overseas business results, pushing the loss ratio to a record high of 106% in 2021. As we exited non-profitable markets, our premium income for the year decreased to KRW 52.9 billion compared to KRW 107.1 billion in the previous year.

In 2022, Korean Re will remain focused on portfolio management to deliver profit over top-line growth based on selective underwriting. In the face of unfavorable overseas business conditions, we will continue our efforts to find new markets and build a more diversified and profitable portfolio with the aim of putting our overseas business back on a solid footing. Domestically, we will not waver from our commitment to promoting the growth of the government-sponsored agricultural insurance market.