This marks a significant upturn from 2022, when the Seoul-based reinsurer reported a net income of KRW 67.0 billion for the same period. Additionally, Korean Re achieved an underwriting income of KRW 215.3 billion.
Despite facing challenges such as fire losses at Hankook Tire and losses stemming from the Turkey earthquake, Korean Re saw notable improvements in the performance of its life and long-term insurance segments, along with certain commercial lines of business.
Moreover, the company generated KRW 127.5 billion in investment income, attributed in part to a revised approach to the classification of financial assets under IFRS 9. Korean Re highlighted a noteworthy change under IFRS 17, whereby foreign currency exchange gains and losses associated with insurance contract liabilities are now reclassified from the insurance profit and loss (P&L) category to insurance finance income & expenses, a sub-item within the investment P&L.
Total insurance revenue for H1 2023 amounted to KRW 2,981.9 billion, reflecting a 5.9% decrease compared to the KRW 3,168.3 billion reported during the same period the previous year. The insurer emphasized a key shift in the income statement under IFRS 17, which now recognizes revenue on an accrual basis rather than a cash basis. This adjustment allows revenue to align more closely with the services provided and excludes deposits. Non-distinct investment components have also been excluded from the insurance P&L.
In summary, Korean Re’s strong performance in H1 2023, with increased net income and underwriting income, underscores the company’s resilience and adaptability in the face of various challenges, while adhering to evolving accounting standards. Operating income for this period totaled KRW 342.8 billion, comprising KRW 215.3 billion from underwriting income and KRW 127.5 billion from investment income.
In an official statement regarding the report, Korean Re said: “In 2023, Korean Re started to release its quarterly business results based on the new accounting standards, IFRS 17 and IFRS 9. Comparative figures from the previous year may not be fully comparable with the 2023 figures disclosed in accordance with both IFRS 17 and IFRS 9 because the 2022 figures for the insurance business are presented on the basis of IFRS 17 while the corresponding figures for the investment business are still based on IAS 39.”