Marine and Aviation

Our marine and aviation business performed well in 2017 with premium income growing by 7.6 percent to KRW 574 billion. This was a remarkable achievement given the persistently challenging market conditions including a downturn in the shipping and shipbuilding industries.

Our hull and energy premiums amounted to KRW 369.3 billion in 2017, up 0.8 percent from a year earlier. This reflected a base effect from a turmoil in the shipping industry and a plunge in global shipbuilding order book in 2016. Our cargo insurance business, however, suffered some setbacks due to softening market conditions, with gross written premiums decreasing by 0.1 percent to KRW 86.4 billion.

The aviation insurance segment made a particularly strong contribution to the growth. We saw our aviation premium income soar by 47.1 percent year over year to KRW 111.8 billion on the back of an increase in our international aviation business. Domestically, we added new satellite business to our book, helping to boost domestic aviation premium income in the face of a softening market.          

Although there are some signs of the marine insurance market improving as marine shipments and shipbuilding orders are bouncing back, the outlook for 2018 does not look promising, given the intensifying competition in the global marine insurance market and the restructuring of the domestic shipping and shipbuilding sectors.

In these difficult market conditions, our focus will remain on maintaining strict underwriting discipline to achieve profitable growth. We will continue to expand our international business by increasing our participation in profitable treaty programs in new markets. The development of new business, such as builder’s risk for naval vessels, fine arts and aerospace business, will be another important focus of our operation. We believe the diversification of our portfolio by geography and line of business should be an important priority for us to ensure sustained growth of our business.