Korean Re and Samsung Life Sign 500 Billion KRW Joint Reinsurance Contract

[Asia Economy Reporter Changhwan Lee] Korean Re announced on the 29th that it signed a quota share reinsurance transaction worth approximately 500 billion KRW with Samsung Life Insurance on the 28th of last month.

The two companies agreed on this quota share reinsurance transaction plan after analyzing the benefits of the transaction over the past year. The effective date is the 1st of this month.

Quota share reinsurance is a financial reinsurance method common in the US and Europe. Unlike traditional reinsurance that compensates for losses from large-scale high-value accidents and natural disasters, the ceding company transfers insurance risk and interest rate risk due to risk rate differences to the reinsurer.

This can lead to a reduction in required capital and is expected to improve financial soundness. Korean Re has moved away from the simple risk premium inward and outward reinsurance methods traded in the domestic life insurance market and has established a separate organization to expand its quota share reinsurance business, laying the foundation for this business over the past four years.

Korean Re emphasized that following the quota share reinsurance contract worth 230 billion KRW signed with Shinhan Life in January, the recent contract with Samsung Life Insurance demonstrates differentiated competitiveness that surpasses advanced reinsurers.