Review of Operations
Note: This section covers business results for the head office only, with gross written premiums used to measure business volume and the combined ratio calculated under IFRS 4.
Domestic Property & Casualty (P&C)
Motor, Surety & Agriculture
Motor
In 2025, the Korean motor insurance market continued to face headwinds, as growth in the number of registered vehicles moderated compared to the previous year. Although the market reverted to an underwriting loss in 2024 after a period of post-pandemic profitability, premium rates continued to decline for a fourth consecutive year, largely driven by government-led pricing measures and guidance aimed at mitigating inflationary pressure. While these initiatives have supported consumer affordability, they have significantly eroded major insurers’ profitability, leaving leading carriers with sustained underwriting deficits amid persistently low average premium levels.
Loss ratios continued to deteriorate throughout 2025, as rate adequacy was undermined by additional premium rate cuts while medical expenses and vehicle repair costs remained on an upward trajectory. The sustained loss cost inflation is expected to push the market-wide loss ratio up by a further 3%p year on year, resulting in the largest underwriting loss since the COVID-19 period.
Despite this tough market environment, Korean Re maintained solid underwriting performance, recording a loss ratio of 77.0% in 2025 — an improvement of 2.6%p from the prior year. While all primary insurers reported underwriting losses, the reinsurance segment remained relatively stable, supported by lower accident frequency and severity as well as the absence of major natural catastrophe events.
On the top line, however, Korean Re recorded negative growth, as demand for quota share reinsurance from primary insurers continued to soften following the adoption of IFRS 17. The termination of additional proportional treaties further weighed on premium volume, which totaled KRW 204.1 billion in 2025. In response, we sharpened our focus on delivering reinsurance solutions more closely aligned with cedants’ needs, while selectively expanding existing programs covering higher-risk exposures.
Looking ahead to 2026, the Korean motor insurance market is expected to remain centered on restoring underwriting profitability, with direct premiums projected to stay around KRW 21 trillion. Although premium rate increases may be considered in light of the significant deterioration in profitability, the scope for meaningful hikes is likely to be constrained by continued government efforts to stabilize prices. At the same time, upward pressure from medical and repair cost inflation is expected to persist, limiting the pace of loss ratio improvement.
Against this backdrop, Korean Re has set a gross written premium target of KRW 227.0 billion for its domestic motor insurance portfolio in 2026, representing approximately 11% year-on-year growth. This target is underpinned by the anticipated growth in business from mutual associations. To support this growth target, we will continue to strengthen cooperation with primary insurers and develop innovative reinsurance solutions tailored to their evolving needs, while maintaining a disciplined focus on sustainable growth.
█ Gross Written Premiums: Domestic Motor
(Units: KRW billion, USD million)
| 2025 (KRW) | 2025 (USD) | 2024 (KRW) | 2024 (USD) | |
| Domestic Motor | 204.1 | 142.3 | 245.9 | 179.7 |
Surety & Credit
Korea recorded GDP growth of 1.0% year on year in 2025. However, fourth-quarter GDP declined by 0.3% quarter on quarter, indicating increased uncertainty regarding the pace of economic recovery. While exports, particularly in the semiconductor sector, provided partial support to growth, contractions in construction activity and capital investment during the fourth quarter constrained overall momentum. These developments are considered to reflect the lingering effects of elevated household debt levels and the prolonged high interest rate environment.
In response to moderating economic growth, the Bank of Korea maintained its accommodative monetary policy stance in 2025, reducing the policy rate by a total of 50 basis points, from 3.0% at the end of 2024 to 2.5% at the end of 2025. Nevertheless, concerns regarding financial stability, including household debt and asset market conditions, put a drag on the pace of monetary easing, and policy rate cuts did not fully translate into lower effective borrowing costs for corporations and households.
Despite the easing cycle in policy rates, effective lending rates remained relatively high, limiting improvements in overall credit conditions. In this environment, loss ratios in the surety and credit insurance segments showed early signs of stabilization following the increase observed in 2024, but a meaningful recovery has yet to materialize. In the real estate market, transaction activity increased, and upward trends in housing prices and lease deposits continued. However, persistent disparities between metropolitan and non-metropolitan regions slowed the pace of loss ratio improvement.
Mindful of these conditions, Korean Re implemented portfolio adjustments aimed at enhancing profitability and reducing volatility, with a continued focus on disciplined underwriting and rigorous risk management. In the coming year, we plan to pursue expansion not only in the domestic market but also selectively in overseas markets despite ongoing market volatility and economic uncertainty. Given the cyclical and economically sensitive nature of surety and credit lines, such expansion will be undertaken on a cautious and selective basis, and supported by conservative underwriting standards.
█ Gross Written Premiums: Surety & Credit
(Units: KRW billion, USD million)
| 2025 (KRW) | 2025 (USD) | 2024 (KRW) | 2024 (USD) | |
| Surety & Credit | 177.2 | 123.5 | 181.6 | 132.7 |
* Surety & credit includes overseas business.
Agriculture
Korean Re has been closely involved in the domestic agricultural and public policy insurance industries since the introduction of various related programs, and continues to serve as a reliable provider of reinsurance capacity. Insurance coverage plays a vital role in safeguarding the well-being of the public and ensuring the stability of farmers’ livelihoods. In this context, we have contributed to the sound development of the local insurance market not only by providing robust reinsurance capacity, but also by acting as a bridge between the domestic market and global reinsurance markets.
The domestic agricultural insurance market—including crop and livestock lines—has continued to expand through active research initiatives and the launch of new products. As a result, gross premiums reached KRW 1,397 billion in 2025, representing a year-on-year growth of 2%. The market is currently entering another transitional phase, driven by developments such as the expansion of revenue insurance. Amid this evolving environment, Korean Re provided stable reinsurance support, writing gross premiums of KRW 173 billion in 2025. The loss ratio stood at 95.6%, reflecting the impact of wildfires in Gyeongsang Province in March 2025 as well as fruit spring frost losses.
The domestic public policy insurance market—including agricultural machinery, natural perils, and environmental liability insurance—remained in a period of subdued growth.
The direct insurance market contracted by 10% from the previous year to around KRW 173 billion, while Korean Re’s written premiums amounted to KRW 73 billion, thus maintaining its position as a leading reinsurer. Supported by the stabilization of underlying direct insurance portfolios and a decline in major loss events across the lines, the market recorded a stable loss ratio of 68.0% in 2025.
Building on our extensive experience as a core reinsurer in the domestic market, Korean Re also plays an active role as a reinsurance capacity provider in overseas agricultural insurance markets. Following a risk-based portfolio restructuring focused on earnings stability since 2020, we returned to profitability in 2023. In 2025, overseas written premiums reached KRW 11 billion, with a favorable loss ratio of 35.4%, thereby sustaining our positive performance momentum.
In 2026, in the face of uncertainties posed by climate change that affects our business worldwide, we will continue our efforts to build a more diversified and profitable portfolio, with the aim of improving the bottom line of our business. As a major capacity provider in the domestic market, we will not waver from our commitment to promoting the growth of agricultural insurance and public policy insurance markets. For our overseas business, we will continue to prioritize portfolio management, emphasizing profitability through selective underwriting.
Agriculture
Korean Re has been closely involved in the domestic agricultural and public policy insurance industries since the introduction of various related programs, and continues to serve as a reliable provider of reinsurance capacity. Insurance coverage plays a vital role in safeguarding the well-being of the public and ensuring the stability of farmers’ livelihoods. In this context, we have contributed to the sound development of the local insurance market not only by providing robust reinsurance capacity, but also by acting as a bridge between the domestic market and global reinsurance markets.
The domestic agricultural insurance market—including crop and livestock lines—has continued to expand through active research initiatives and the launch of new products. As a result, gross premiums reached KRW 1,397 billion in 2025, representing a year-on-year growth of 2%. The market is currently entering another transitional phase, driven by developments such as the expansion of revenue insurance. Amid this evolving environment, Korean Re provided stable reinsurance support, writing gross premiums of KRW 173 billion in 2025. The loss ratio stood at 95.6%, reflecting the impact of wildfires in Gyeongsang Province in March 2025 as well as fruit spring frost losses.
The domestic public policy insurance market—including agricultural machinery, natural perils, and environmental liability insurance—remained in a period of subdued growth. The direct insurance market contracted by 10% from the previous year to around KRW 173 billion, while Korean Re’s written premiums amounted to KRW 73 billion, thus maintaining its position as a leading reinsurer. Supported by the stabilization of underlying direct insurance portfolios and a decline in major loss events across the lines, the market recorded a stable loss ratio of 68.0% in 2025.
Building on our extensive experience as a core reinsurer in the domestic market, Korean Re also plays an active role as a reinsurance capacity provider in overseas agricultural insurance markets. Following a risk-based portfolio restructuring focused on earnings stability since 2020, we returned to profitability in 2023. In 2025, overseas written premiums reached KRW 11 billion, with a favorable loss ratio of 35.4%, thereby sustaining our positive performance momentum.
In 2026, in the face of uncertainties posed by climate change that affects our business worldwide, we will continue our efforts to build a more diversified and profitable portfolio, with the aim of improving the bottom line of our business. As a major capacity provider in the domestic market, we will not waver from our commitment to promoting the growth of agricultural insurance and public policy insurance markets. For our overseas business, we will continue to prioritize portfolio management, emphasizing profitability through selective underwriting.
█ Gross Written Premiums: Agriculture
(Units: KRW billion, USD million)
| 2025 (KRW) | 2025 (USD) | 2024 (KRW) | 2024 (USD) | |
| Domestic Agriculture | 246.1 | 171.5 | 268.3 | 196.1 |
| Overseas Agriculture | 11.0 | 7.7 | 4.3 | 3.1 |
| Total | 257.1 | 179.2 | 272.6 | 199.2 |