Korean Re has announced its financial results for the first half of 2023 reporting a net income of KRW 268.9 billion, with an underwriting income of KRW 215.3 billion.
In the same period last year, the Seoul-based reinsurer reported a net income of KRW 67.0bn with an underwriting income of KRW 107.6bn.
According to the firm, despite being hit by fire losses at Hankook Tire and losses from the Turkey earthquake, there was a significant improvement in the business performance of life and long-term insurance as well as some commercial lines of business.
Additionally, the reinsurer generated an investment income of KRW 127.5 billion. There was an increase in evaluation gains due to a new approach to the classification of financial assets under IFRS 9.
Korean Re also noted that under IFRS 17, foreign currency exchange gains and losses on insurance contract liabilities are reclassified from the insurance profit and loss (P&L) to insurance finance income & expenses, which is a sub-item of the investment P&L.
Insurance revenue amounted to KRW 2,981.9 billion in H1 2023, a figure 5.9% lower compared to the KRW 3,168.3 billion reported in the same period last year.
According to the reinsurer, one of the major changes in the income statement based on IFRS 17 is the recognition of revenue on an accrual basis not on a cash basis, which allows revenue to reflect the services provided and exclude deposits. Non-distinct investment components are excluded from the insurance P&L.
Operating income was KRW 342.8 billion which was made up of KRW 215.3 billion of underwriting income, and KRW 127.5 billion of investment income.
Korean Re stated: “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.”
