Our premium income from agriculture and other specialty lines increased by more than 7 percent year over year to KRW 345.8 billion in 2017, demonstrating Korean Re’s growing strength in specialty lines. In particular, we saw our international agricultural insurance business grow robustly, contributing to the company’s overseas business growth.
The domestic crop insurance market declined by 2 percent year over year to KRW 316.2 billion in total premium income due to a continuous decrease in original premium rates following favorable loss experiences since 2013. On the other hand, the livestock and natural perils insurance markets grew in size as there was an increase in demand in the wake of major natural catastrophe events like heat waves and earthquakes. Another driver of growth was the combined efforts by the government and the insurance industry to increase the penetration rates of livestock and natural perils insurance across society.
In terms of market loss experiences by line of business, crop insurance recorded a loss ratio of 94 percent due to large losses from hail. The loss ratio of livestock insurance further aggravated to 89 percent as the livestock industry suffered from more heatwaves in the summer of 2017 following the damage from hot weather in 2016. Natural peril insurance resulted in a loss ratio of 20 percent due to the absence of major natural disasters such as typhoons.
Korean Re is leading the local reinsurance market for crop, livestock and natural perils businesses by exclusively providing local insurers with access to overseas reinsurance capacity. We have been successfully playing this role as a reliable provider of reinsurance capacity, contributing to market development for government-sponsored insurance plans.