KOSPIInsurance003690

Korean Reinsurance Company

₩14,410▲ 0.63%2026-10-02 close

Market Cap

₩2.5T

Turnover

₩1.8B

Volume

130,000 shares

Shares out.

180M

PER

6.0×

PBR

0.6×

EPS

₩2,411

Dividend Yield

3.93%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩570 per share · Prices as of the 2026-10-02 close

Report overview

Record Profit Meets a Softening Rate Cycle

Korean Re, the country's only dedicated reinsurer, has lifted its earnings power by pruning low-margin treaties and expanding overseas assumed business, but with global reinsurance rates now softening in 2026, top-line and margin trends are diverging.

1
Annual insurance revenue fell from KRW 5.763tn in 2022 to KRW 4.976tn in 2025, yet operating profit rose every year from KRW 352.4bn to KRW 470.9bn over the same span, so shrinking scale and rising profit have moved together.
2
Operating profit reached KRW 291.2bn in Q1 2026 and KRW 175.0bn in Q2 2026, so the first half alone approached the full-year 2025 level; the company attributed this to fewer large losses and better investment results.
3
The overseas share of insurance revenue rose from 25 percent in 2022 to 44 percent in 2025, and management has set an 80 percent overseas target under its Vision 2050 plan.
4
Shareholder returns have been stepped up: a March 2026 board resolution cancelled all 18.1 million treasury shares, worth about KRW 245.4bn, with the cancellation set for March 31.
5
The cycle, however, favors buyers: Aon reported that global reinsurance capital hit a record USD 785bn at the April 1, 2026 renewal, a key season for Japan, Korea and India, and that buyers clearly led the market.

Business structure

Korean Re was founded in 1963 as the Korean Reinsurance Corporation, converted to a joint-stock company in 1978, adopted its current name in 2002, and has been listed on the main board since its December 1969 IPO.

It is Korea's only dedicated reinsurer, handling ceded and assumed reinsurance across general lines such as fire and comprehensive, marine, liability, engineering and motor, as well as long-term and life reinsurance.

Earnings rest on two pillars: insurance revenue from assuming risk from primary insurers, and investment income from the asset pool those premiums build.

Domestically it holds a near-monopoly position, but qualified foreign insurers can write reinsurance with Korean insurers without setting up a local branch or subsidiary, so it competes directly with global reinsurers.

The growth engine has shifted offshore: the overseas share of insurance revenue rose from 25 percent in 2022 to 44 percent in 2025, and overseas insurance revenue grew from KRW 2.043tn in 2023 to KRW 2.145tn in 2025.

The regional mix is also being reshaped, as the company keeps reducing Asian dependence in favor of Europe and North America, with Asia's share of overseas assumed business falling from 46.9 percent in 2022 to 36.3 percent in Q1 2026.

Network expansion has continued, and in January 2026 it opened an IFSC branch at GIFT City in Gujarat, northwestern India, to strengthen local regulatory reach and build a medium-term earnings source in emerging markets.

Management says it will keep pursuing selective, profitability-based underwriting and diversification by line and region.

Earnings trend

Quarterly revenue · Operating profit

₩1.2T₩137.9B25Q2₩1.2T₩153.9B25Q3₩1.3T₩55.6B25Q4₩1.2T₩291.2B26Q1₩1.3T₩175B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩5.8T₩352.4B2022₩5.2T₩363.7B2023₩5.1T₩405.4B2024₩5T₩470.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.2T	₩137.9B	11.0%
2025Q3	₩1.2T	₩153.9B	12.5%
2025Q4	₩1.3T	₩55.6B	4.3%
2026Q1	₩1.2T	₩291.2B	25.3%
2026Q2	₩1.3T	₩175B	13.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩5.8T	₩352.4B	₩278.5B	—	10.3%	305.7%
2023	₩5.2T	₩363.7B	₩283.9B	—	8.7%	270.9%
2024	₩5.1T	₩405.4B	₩316.7B	—	9.2%	281.1%
2025	₩5T	₩470.9B	₩322B	—	8.7%	287.1%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The key metrics point in two directions. Annual insurance revenue shrank for four straight years: KRW 5.763tn in 2022, KRW 5.168tn in 2023, KRW 5.137tn in 2024 and KRW 4.976tn in 2025.

Operating profit, by contrast, rose every year from KRW 352.4bn in 2022 to KRW 363.7bn, KRW 405.4bn and KRW 470.9bn, while net profit attributable to owners climbed from KRW 278.5bn to KRW 283.9bn, KRW 316.7bn and KRW 322.0bn.

Expressed against insurance revenue, the operating margin improved from roughly 6 percent in 2022 to around 9 percent in 2025.

Management and the industry point to the pruning of low-margin treaties: domestically the company cut assumed volumes in property, personal accident and livestock lines in response to intensifying rate competition and weaker profitability, while continuing to grow abroad. Quarterly results are volatile.

Q4 2025 was the trough, with operating profit of KRW 55.6bn and net profit of KRW 39.5bn, before Q1 2026 jumped to KRW 291.2bn and KRW 214.6bn respectively, followed by KRW 175.0bn and KRW 132.6bn in Q2 2026. Q2 2026 insurance revenue of KRW 1,324.4bn was up from KRW 1,153.2bn in the prior quarter.

For the first half the company cited higher insurance revenue from expanded overseas assumed business and a decline in large losses, plus equity portfolio gains amid a strong stock market that drove the improvement in total investment income.

Capital and cash flow have also thickened: total equity grew from KRW 2.716tn in 2022 to KRW 3.683tn in 2025, and operating cash flow expanded from KRW 638.6bn in 2023 to KRW 1,668.7bn in 2025 (total liabilities of KRW 10.576tn and a 287.1 percent liabilities-to-equity ratio reflect the insurance-liability-heavy nature of the sector).

Industry analysis

The global reinsurance cycle has moved from the hard market of 2023-2025 into buyer-friendly territory. Aon reported that global reinsurance capital reached a record USD 785bn at the April 1, 2026 renewal, a season dominated by Japan, Korea and India, and that buyers led the market.

The rate declines are not marginal: Guy Carpenter's April 1 renewal report noted risk-adjusted rate reductions of up to 20 percent in the Asia-Pacific market.

In its July renewal report, Guy Carpenter said abundant reinsurer capacity in the traditional property market continues to drive a progressively competitive pricing environment, with the global property catastrophe rate-on-line index down 16 percent since January 1, 2026.

The drivers are cumulative: two consecutive years of solid underwriting profitability, a sharp increase in ILS and catastrophe bond capacity, and benign catastrophe loss experience in 2025 and Q1 2026. The outlook also leans toward pressure.

In a September 2026 report, S&P Global Ratings said abundant capacity and lower-than-expected catastrophe losses suggest reinsurance pricing will stay under pressure through 2027, and that property and casualty reinsurers' underwriting margins and overall profitability will gradually compress over 2026-2027.

That said, the same report judged that underwriting margins and profitability should remain sufficient to cover the sector's cost of capital.

Growth opportunity sits in the coverage gap: S&P pointed to a protection gap of about 60 percent in the first half of 2026 and to innovative products such as parametric drought cover, noting the gap is most pronounced in cyber, renewable energy and data centers.

In this environment Korean Re has leaned toward selection over volume, and industry observers read its stance as prioritizing risk selection over aggressive volume growth even while global rates were firm.

Outlook

The strategic axis remains offshore. Since taking office in 2013, CEO Won Jong-gyu has framed Vision 2050 around becoming a top-class global reinsurer and lifting the overseas revenue share to 80 percent.

Yet commentators note that a 44 percent overseas share is meaningful progress but only a midpoint against the 80 percent goal, and argue that quantitative expansion now needs to accompany qualitative improvement.

The tone has shifted recently: the company plans to broaden its previously inward-focused approach into growth-plus-quality, cutting low-margin contracts to lower the combined ratio while expanding overseas assumed business to restore top-line and build new earnings capacity. The forward earnings gauge is holding.

The company reported Q2 2026 contractual service margin (CSM) of KRW 978.0bn, up KRW 10.3bn from KRW 967.7bn at end-2025, with general P&C excluded because it applies the premium allocation approach, so the figure reflects long-term and life business (company release, August 2026).

Conversely, new business CSM fell to KRW 45.1bn from KRW 66.1bn a year earlier, a KRW 21.0bn decline, a contrary signal for the growth base.

On capital policy, the company's value-up plan pairs a continued high-dividend stance with managing its K-ICS solvency ratio in the 180-200 percent range, and it targets a payout ratio of at least 25 percent alongside annual dividend growth of more than 10 percent.

The investment book carries more risk assets, as domestic bonds accounted for 32.3 percent and foreign bonds 28.7 percent of managed assets in Q2 2026, with equities increased versus the prior year.

Valuation

PER

6.0×

PBR

0.6×

ROE

12.4%

EPS

₩2,411

BPS

₩22,747

Dividend per share

₩570

Korean Re trades in the group of Korean listed insurers whose shares sit at a wide discount to book value.

The profit line itself has trended up rather than down: annual operating profit and net profit attributable to owners rose for four consecutive years from 2022 through 2025, and the sum of the most recent four quarters (Q3 2025 through Q2 2026) exceeds the full-year 2025 figure.

The reasons cited for the market not awarding a book-level multiple to that earnings stream include the softening rate cycle, quarter-to-quarter catastrophe loss volatility, and four straight years of shrinking insurance revenue.

On dividends, the February 2026 board approved a total of KRW 100.7bn for the fiscal 2025 year-end payout, marking a third consecutive record total and the first time cash dividends exceeded KRW 100bn, a level that stands relatively high within the KOSPI insurance sector.

In addition, the March 2026 cancellation of all 18.1 million treasury shares reduced total shares outstanding, another variable affecting per-share metrics.

The multiple debate therefore hinges on whether the earnings recovery persists or softening rates erode margins, and the evidence for that will show up in quarterly loss ratios and the CSM trend.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Selective underwriting is showing up in margins

While insurance revenue declined for four consecutive years, operating profit rose each year from KRW 352.4bn in 2022 to KRW 470.9bn in 2025. Measured against insurance revenue, the operating margin improved from roughly 6 percent to around 9 percent.

The company says it has been screening out low-profitability contracts in response to intensifying domestic competition. This is a stretch in which trading scale for margin has become visible in the numbers.

Overseas assumed business has become a real earnings source

The overseas share of insurance revenue rose from 25 percent in 2022 to 44 percent in 2025. On a nine-month 2025 basis, overseas insurance revenue of KRW 1,238.0bn accounted for 34.4 percent of total insurance revenue, the largest single component.

Management says it is building a structure in which domestic results offset overseas losses and overseas results absorb domestic volatility. Diversification by region and line can act as a buffer against single-market shocks.

Capital headroom and executed shareholder returns

Before transitional measures, the K-ICS ratio stood at 206.6 percent at end-Q3 2025, far above the regulator's 130 percent guideline, having risen for six consecutive quarters from 181.2 percent at end-Q1 2024.

The March 2026 board resolved to cancel 18.1 million treasury shares, with the cancellation amount set at KRW 245.436bn. Because a reinsurer with high loss volatility executed a large buyback cancellation, observers read it as a judgment that sufficient capital headroom had been secured. Total equity also grew from KRW 2.716tn in 2022 to KRW 3.683tn in 2025.

Bear factors

Softening rates set to erode margins

Guy Carpenter reported the global property catastrophe rate-on-line index down 16 percent from January 1, 2026. Risk-adjusted reductions at the April 1 Asia-Pacific renewal reached up to 20 percent, and Korea is a core market in that season.

S&P Global Ratings' base case assumes continued price softening lifts combined ratios by roughly 2-4 percentage points over 2026-2027. Because rates are locked in at renewal, the earnings impact of softer pricing arrives with a lag.

Four straight years of shrinking scale

Annual insurance revenue contracted from KRW 5.763tn in 2022 to KRW 4.976tn in 2025. Top-line metrics have not escaped decline, and with insurance revenue, the key scale gauge under IFRS 17, still falling, commentators are watching whether the global pivot converts from share gains into actual growth.

One industry official said a profitability-first strategy is a rational short-term choice, but that unless global expansion grows enough to replace the domestic contraction, questions about top-line growth drivers are unavoidable. New business CSM falling to KRW 45.1bn from KRW 66.1bn a year earlier fits the same pattern.

Wide swings in quarterly profit

Q4 2025 delivered only KRW 55.6bn in operating profit and KRW 39.5bn in net profit, before Q1 2026 surged to KRW 291.2bn and KRW 214.6bn. A structure in which profit swings more than fivefold in a single quarter is heavily driven by catastrophe losses, large claims and the timing of investment results.

Since the company attributed the first-half investment gain to equity portfolio performance in a strong stock market, the same line item can reverse if markets turn. This is a sector where annualizing a single quarter is unreliable.

Risk factors

Catastrophe and large-loss exposure

Because reinsurers assume volatile risks such as major natural catastrophes, the loss ratio drives results.

Real events accumulated in 2026: the Kumamoto earthquake in Japan in July, heatwaves and wildfires in Southern Europe in July and August, and Hurricane Lala in mid-August, which produced the first meaningful insured loss of this year's hurricane season.

Korean Re has previously absorbed catastrophes including the Los Angeles wildfires and the Yeongnam wildfires in Korea. Losses in the back half of the Atlantic hurricane season are a key swing factor for second-half earnings.

Investment income dependence and market volatility

The first-half 2026 profit jump reflected improved investment income alongside insurance results.

Domestic bonds were 32.3 percent and foreign bonds 28.7 percent of managed assets, with equities raised versus the prior year, and the company said equity portfolio performance amid a strong market drove the overall investment gain.

A larger equity weighting amplifies contribution in rising markets but works in reverse when markets fall. Interest rate and currency moves also affect the valuation of overseas assets and liabilities simultaneously.

Regulation and governance

Regulatory change bears directly on capital and liability measurement. The company says it will keep writing new assumed business in line with institutional shifts such as more realistic insurance liability discount rates and basic capital ratio rules.

On governance, a brother-led structure continues with Won Jong-ik as board chair and Won Jong-gyu as CEO, and the Financial Supervisory Service previously issued a management caution, noting that a non-outside director was appointed board chair without an objective vetting process.

In addition, the March 2026 shareholder meeting removed the charter clause excluding cumulative voting, which applies from the first shareholder meeting convened for director elections after September 10, 2026.

What to watch next

September-October 2026
The peak of the Atlantic hurricane season and typhoon losses. Swiss Re put insured natural catastrophe losses at about USD 42bn in the first half of 2026, below the 10-year average of USD 50bn, though recent events underscore tail risk, making this the key driver of second-half loss ratios.
During November 2026
Q3 2026 results disclosure. Whether insurance revenue stops declining, and whether CSM (reported by the company at KRW 978.0bn in Q2 2026) and new business CSM rebound, is the first checkpoint on a growth turn.
Early January 2027
Broker reports on the January 1, 2027 renewal. Gallagher Re said that as long as forecast forward returns remain attractive, there is plenty to drive competition heading into the 2027 renewals, so whether rate declines widen or stabilize sets the starting point for 2027 margins.
Around February 2027
The board resolution on the fiscal 2026 year-end dividend. Watch whether the policy of a payout ratio above 25 percent and dividend growth above 10 percent is actually maintained, and how the return toolkit is composed after the full treasury share cancellation.
The March 2027 annual general meeting
Following removal of the clause excluding cumulative voting, the system applies from the first shareholder meeting convened for director elections after September 10, 2026. How director election agenda items are handled and how minority shareholders vote will be the practical test of governance change.

Overall view

The past four years at Korean Re can be summarized as smaller scale with larger profit. Insurance revenue shrank from KRW 5.763tn in 2022 to KRW 4.976tn in 2025, while operating profit rose for four consecutive years from KRW 352.4bn to KRW 470.9bn and net profit attributable to owners from KRW 278.5bn to KRW 322.0bn.

With operating profit of KRW 291.2bn in Q1 2026 and KRW 175.0bn in Q2 2026, first-half earnings scaled up further, which the company attributed to expanded overseas assumed business, fewer large losses and better investment results.

The cycle, however, runs the other way: Guy Carpenter reported Asia-Pacific risk-adjusted rate cuts of up to 20 percent at the April 1 renewal, and S&P expects property and casualty reinsurers' underwriting margins to compress gradually over 2026-2027.

Shareholder returns have moved to execution, with a third consecutive record dividend total and the first breach of KRW 100bn in cash dividends joined by the March 2026 decision to cancel all 18.1 million treasury shares.

The debate therefore narrows to two questions: how long the margin gained through selective underwriting can withstand falling rates, and when overseas expansion begins to replace the domestic contraction in absolute scale. This report is for information purposes only and contains no buy or sell opinion and no target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.