Korean Re to Establish Reinsurance Brokerage Corporation in the United States

[Asia Economy Reporter Oh Hyung-gil] Korean Re announced on the 26th that it plans to establish a reinsurance brokerage corporation in the United States to expand its entry into the U.S. market.

The United States is the world's largest insurance market, accounting for about 40% of global insurance premiums. Korean Re aims to start operations in the U.S. by September 2021.

By strengthening local sales and diversifying underwriting channels, Korean Re plans to improve service quality for clients in the U.S. and increase the volume of reinsurance premiums in the U.S. market from the current level of $220 million to over $300 million by 2025. The candidate location for the brokerage corporation is the northeastern U.S. region, such as New York, with plans to expand nationwide in the future.

Korean Re operates a representative office in New York, U.S., but since the representative office cannot conduct sales activities, establishing a brokerage corporation is expected to overcome this limitation.

The brokerage corporation, like an insurance sales corporation or branch, can actively engage in face-to-face sales while being established with relatively low capital. It is expected not only to provide reinsurance volume to Korean Re but also to generate commission income through brokering business for other reinsurers.

Since President Won Jong-gyu took office in June 2013, Korean Re has accelerated its overseas market entry by consecutively establishing six overseas bases, including a local corporation at Lloyd's in the UK, a branch in Labuan, Malaysia, a branch in Dubai, a local corporation in Switzerland, a branch in Shanghai, China, and a representative office in Bogota, Colombia.

A Korean Re official said, "The goal is to establish detailed implementation plans within this year, apply for establishment approval from regulatory authorities in the first half of next year, and start operations in September 2021. Although the schedule may be delayed due to the COVID-19 situation, entering the U.S. market is a task that can no longer be postponed."