Throughout 2017, we never stopped endeavoring to enhance our global competitiveness backed by strong and stable growth in the face of rapidly evolving reinsurance business and regulatory environments as well as heavy losses from natural catastrophes.
In fact, 2017 was the second costliest year for the global insurance and reinsurance industry as natural catastrophe insured losses worldwide came to more than USD 130 billion. This was 2.6 times the annual average natural catastrophe losses since 2000. The record-breaking natural catastrophe events included Hurricanes Harvey, Irma and Maria (HIM) in the United States and the Caribbean. These three hurricanes alone cost the global (re)insurance industry USD 80 billion and set new records in wind speed, lasting time and the amount of rainfall they brought.
Despite the devastating natural catastrophe losses, we delivered strong underwriting results for 2017 as we focused on securing profitable accounts from around the world based on the knowledge and expertise we have built in the domestic and Asian markets. We are proud to report an increase in underwriting profit and a combined ratio of 98.4 percent in a year when the global (re)insurance industry was hard hit by unusually large natural catastrophe losses. Our years of effort to diversify the company’s business portfolio showed its value in boosting our underwriting performance. We have added non-property risks to our book of business to deal with softening market conditions in property lines and spread our natural catastrophe risk exposures.
We reported a 7.8 percent increase in gross written premiums to KRW 7,208.1 billion for 2017. Our net written premiums increased by 6.9 percent to KRW 5,021.8 billion. Paid claims increased by KRW 276.1 billion to KRW 3,726.9 billion but the loss ratio improved to 79.9 percent. Net operating expenses climbed by 12.6 percent to KRW 925.8 billion. We managed to record a solid net income of KRW 133 billion for the year, although it was down from the previous year when we had posted the second-highest net income in our history.
In terms of total assets, 2017 was a record year for us as we saw our total assets surpass the KRW 10 trillion mark. The value of our total assets grew by KRW 484.2 billion year over year to KRW 10,065.3 billion as of late December 2017. Our invested assets amounted to KRW 5,623.5 billion, up KRW 319 billion year over year.
The Korean insurance market, the 7th largest in the world by premium income, continued to slow down in 2017, with total premiums falling by 1.9 percent compared to the previous year amid improving but still weak macroeconomic conditions. The life insurance market contracted by 4.9 percent, while the non-life insurance market grew by 2.4 percent. A decrease in the sales of savings insurance and retirement annuity plans was one of the key downside factors.
Korean Re has achieved an average annualized growth of 5.1 percent over the past five years, with a market share of 60 percent or so in Korea. This would not have been possible without our 55 years of experience and knowledge in the domestic market and trustworthy relationships with local primary insurers. As our growth hinges on the development of the local insurance market, we will remain committed to achieving joint growth with our business partners.
As an important part of our growth strategy, we have been setting our sights on overseas markets with the goal of becoming one of the top global reinsurers. Since we announced Vision 2050: Value-Creating Reinsurance Leader in 2014, we have been broadening our global network and presence. We established a subsidiary at Lloyd’s in April 2015 and two branches in Labuan, Malaysia, in July 2017 and in Dubai, the UAE in January 2018. We have been awaiting approval for our branch in Shanghai from the Chinese insurance supervisory authorities, and work has been underway to open a new European subsidiary in Switzerland by the end of 2019.
Moving into 2018 when we are celebrating our 55th anniversary, we renew our commitment to realizing our vision of becoming a value-creating reinsurance leader in the world. We will always keep a watchful eye on market changes and make swift responses to any changes that could affect our business and clients. This ability to read trends and respond nimbly will be essential for us to become a player that leads the global reinsurance market.
We thank you for your continued support for Korean Re and look forward to working more closely with our clients and other business partners to bring growth and value to all stakeholders.
President and CEO