Korean Re Signs 700 Billion KRW Joint Reinsurance Contract with Samsung Life

Korean Reinsurance Company has signed a reinsurance contract worth 700 billion KRW with Samsung Life Insurance.

Korean Reinsurance announced on the 4th that it had entered into such a co-reinsurance transaction with Samsung Life Insurance. The contract is based on reserves amounting to approximately 700 billion KRW, with the liability commencement date set for November 1, 2023.

Unlike traditional reinsurance that compensates for losses caused by large-scale high-value accidents and natural disasters, co-reinsurance involves the primary insurer ceding not only risk premiums but also savings and additional premiums to the reinsurer, thereby transferring interest rate risk, lapse risk, and others as well. Through this, the primary insurer can preemptively mitigate risks arising from financial market fluctuations and improve financial soundness by reducing required capital.

Korean Re has been preparing the business foundation for implementing co-reinsurance since 2017, following the introduction of the new accounting standard IFRS17 and the new solvency regime (K-ICS). Based on this, it has signed co-reinsurance contracts with Samsung Life Insurance, Shinhan Life, and others, providing primary insurers with new reinsurance solutions that depart from traditional methods.

A Korean Re official stated, "Demand for co-reinsurance is expected to increase in the future," adding, "We plan to actively respond to new reinsurance demands from insurers by offering differentiated services."