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• The Global Reinsurance Forum reported a 17% increase in markets with barriers to global reinsurance last year.
• Australia and New Zealand among five countries considering new restrictions on cross-border reinsurance.
• Some countries have tightened reinsurance rules or disincentivised overseas risk ceding, including China, India, Vietnam, and Thailand.
• Indonesia's reinsurance market faces challenges due to previous government restrictions.
• New Zealand earthquakes underline importance of distributing risk internationally.
• Experts advocate for open markets but there are concerns regulators might not fully appreciate the bigger picture.
• JKL Partners is looking to sell a 77% stake in Lotte Insurance for around 2 trillion won by the end of 2024 according to local media reports.
• Potential buyers include local financial holding companies and global insurance firms, with international private equity firms also showing interest.
• Market insiders question the valuation given Lotte Insurance's market capitalisation of 1.15 trillion won.
• Lotte reported a profit recovery with operating profits at 397.3bn won last year.
• However, profits in Korea's insurance industry in general skyrocketed 45.5% following the adoption of IFRS 17 in 2023, prompting scrutiny on valuations in the market.
• As of end-September 2023, Korean insurers’ overseas CRE exposure hit KRW31.9 trillion (US$23bn), the highest among Korean financial institutions.
• Majority of overseas CRE exposure is indirect, through beneficiary certificates, with a notable portion in office assets and higher-risk mezzanines and sub-tranches.
• Fitch anticipates Korean insurers’ profitability will remain stable, supported by steady increases in contractual service margins and sound underwriting performance.
