SEOUL, April 5 (Korea Bizwire) – Multinational reinsurers are upping the ante to gain a bigger share in South Korea dominated by homegrown player Korean Re Co., industry people said Tuesday.
Pacific Life Re Ltd., the reinsurance division of the U.S.-based Pacific Life group, joined other global peers such as Munich Re and Swiss Re by obtaining regulatory approval last week from the Financial Services Commission (FSC) to strengthen their presence in Korea, the FSC said.
Reinsurance is insurance that is purchased by an insurance company from one or more other insurers directly or through a broker as a means of risk management.
Foreign reinsurers have set up their branches here after years of operations through regional business headquarters in Asia. Pacific Life Re also handled services for Korean clients from its regional headquarters in Singapore until early this year.
The U.S. reinsurer works with clients in North America, Britain, Asia and Australia mainly to manage their mortality, longevity, and morbidity risk.
“This move demonstrates our on-going commitment to further deepen our footprint in Asia. The recent (financial) market reforms (in Korea) present us with a unique opportunity to providing a fresh and innovative approach to life reinsurance in the Korean market,” Alex King, managing director of Pacific Life Re Asia, said in a statement released on March 30.
Asia Capital Reinsurance Group Pte, a Singapore-based reinsurer, is also expected to get a nod from the financial regulator as early as next month to serve airlines, shipping, energy firms and builders here, the FSC said.
Currently, Korean Re controls the domestic reinsurance market, estimated at some 10 trillion won (US$8.65 billion), with a share of about 60 percent, with the remainder split up among foreign reinsurers that also include Hannover Re and SCOR both from Germany and Reinsurance Group of America Inc. (RGA).
As for the expected impact of their foray into the local market, a Korean Re official said, “They won’t become a game changer as the domestic market is nearly saturated.”