SEOUL, KOREA - Korean Re aims to becoming recognized as a top-five reinsurer throughout the world by 2020. The company plans to accomplish this through active development of new products and exploration of fresh global markets, a top executive of the reinsurance company recently stated.
Noting that Korean Re jumped from 32nd in the world in 1998 to 10th in 2013, Park Jong-won, CEO of the reinsurance company, said, "We will are not satisfied with our current position. We will work diligently to achieve the goal of joining the ranks of the top five global reinsurers by 2020 by drastically expanding our overseas reinsurance sales and pursuing high growth with the spirit of challenge.
In an interview with Korea IT Times, Park said, "To become one of the top five reinsurers in the world, Korean Re has to be able to compete with world-famous reinsurers. Accordingly, its successful advancement into the overseas markets holds the key to this progress."
Explaining that overseas sales now account for over 20% of Korean Re's total turnover, CEO Park said, "Korean Re started to explore overseas markets in 1998. It was not easy to make headway into the overseas market at that time. However, we did not give up and concentrated our business strategy on the relatively small and rapidly-developing Asian market. In particular, we targeted the reinsurance market in the vessel field where Korea has a distinct advantage."
Commenting that credit status is very important to undertake big insurance contracts, he said, "In 2002, Korean Re attained the credit rating of 'BBB-' from S&P. However, I, along with other executives, flew to the S&P headquarters in New York and explained Korean Re's strong points to S&P executives. Afterwards the company was upgraded to the rating of A-. Since then, Korean Re has maintained this A- rating for the seven consecutive years, subsequently allowing its overseas business to gain further momentum."
Overseas reinsurance business
Korean Re is aiming to boost the percentage of its overseas reinsurance business to 50% of the total assumed reinsurance premiums by 2020.
"To achieve this goal, we will continuously advocate the exploration of new overseas markets, including China, East Europe, and Latin America. We also plan to convert overseas representative offices into branches as a means of securing more footholds in foreign countries," said Park.
Korean Re is also strengthening overseas training programs for its staff members to promote their expertise on the reinsurance business.
"For instance, approximately 5% of the company's staff are constantly engaged in overseas training courses. In particular, Korean Re is actively carrying out an overseas program for master's course, training at foreign reinsurance companies in Europe, and training at its overseas branches in London, Singapore, and Hong Kong," he mentioned.
Differentiated market competitiveness strategy
Asked about Korean Re's differentiated market competitiveness strategy amid the continuing trend of low interest rates and low growth, CEO Park said, "Our company will celebrate the 50th founding anniversary this year. Over the past 50 years, we have learned various methods to cope with inevitable crises. Now, the company has grown to be placed in the global top 10 and has succeeded in securing advanced technology, expertise, and strong corporate culture that can rank with first-class global reinsurers.
"Now we also have to plan ahead for the upcoming 50 years amid possible storms that may arise. First of all, we will build a managerial base this year to enter the ranks of the global top five. On this note, we will establish a variety of safety equipment to allow us to tide over unpredicted risks. We also plan to concentrate our energy on developing new growth engines for the next half a century."
On the managerial secret that enabled Korean Re to enter the ranks of the global top 10 reinsurers over the past 15 years, he said, "Thriving and collapsing companies have different corporate culture. The reason that Korean Re was reborn as Asia's No. 1, and is recognized on the global stage amongst the top 10 reinsurers is the change of its corporate culture. To achieve a big dream, a company must change its culture and climate first.
"In 1998, when I began working at Korean Re, the company was on the verge of bankruptcy with the loss for the term of 280 billion won ($255 million). However, the bigger problem was the defeatism spreading amongst the reinsurer. Most employees seemed to have an insufficient will for revival owing to the complacent climate often prevalent in a public corporation.
"Accordingly, I tried to change the corporate culture drastically by cutting down the unnecessary manpower by 30% and introducing a competition system, subsequently injecting tension into the organization."
Commenting that Korean Re executives and staff began to hike along the ridges of mountains linking from Mt. Baekdu to Mt. Jiri in 2004, CEO Park said, "All executives and staff members finished hiking from Mt. Jiri to Mt. Seorak over the course of six years. From 2010, we began hiking from Mt. Seorak to mountains in the south.
"Through mountain climbing, we were able to separate ourselves from the past attitude of being afraid of challenge and began to enjoy challenge itself. It was a means of changing the corporate culture and bolstering comradeship, not to mention building up physical strength," he noted.
Biggest hardship
When asked for his biggest hardship and most important achievement as the CEO, Park said, "During the period from 1980 to 1997, the company suffered from serious managerial difficulties. Right after the Asian financial crisis in 1997, I had to fire a considerable number of employees. That was the bitter trail for me.
"On the other hand, I succeeded in upgrading the global status of Korean Re to 10th in the world from 32nd in 1998. Moreover, we are now dreaming of becoming one of the global top 5 reinsurers in the near future. This has certainly been the most rewarding experience for me."
Noting that he always stresses "wild nature" to his workers, Park added, "The wild nature I mention refers to confidence in attaining a goal in any extreme situation. To survive in nature, rapid circumstantial judgment is necessary. Likewise, professionalism and ability is inevitable. These traits are also seen in wild nature. In the case of selecting new employees, I check the candidates' wild nature first, rather than their knowledge."
Through strengthening of risk management, strategic response to the changing environment, and development of future-oriented growth engines, Korean Re aims to jack up its global ranking from 10th in 2012 to 8th in 2015 and again to fifth in 2020.
