As insurance results soar, Korean Re 9M’s net income hits KRW 292.9 billion.
English To Korean: Reported Significant 292.9 Billion
For the first nine months of 2023, Korean Re reported net income of KRW 292.9 billion, including KRW 194.9 billion from insurance.
The net income for this year is significantly higher than the KRW 114.9 billion reported for the same period in 2022, when insurance income was KRW 170.6 billion less.
Korean Re reported a “significant improvement” in the business performance of life and long-term insurance as well as certain commercial lines of business, despite noting losses at Hankook Tire and losses from this year’s earthquake in Turkey.
In the first nine months of 2023, Korean Re’s investment income increased to KRW 183.7 billion from KRW -23.2 billion in the previous year. The company clarified that a new method for classifying financial assets under IFRS 9 led to an increase in evaluation gains.
Korean To English
Korean Re noted that “it is also important to keep in mind that under IFRS 17, gains and losses on foreign currency exchange on insurance contract liabilities are reclassified from the insurance profit and loss (P&L) to insurance finance income & expenses, which is a sub-item of the investment P&L.”
Insurance income for the first nine months of 2022 was KRW 4,524.1 billion, a minor decrease from KRW 4,929.4 billion in 2022.
One of the main modifications to the income statement based on IFRS 17, according to Korean Re, is the recognition of revenue on an accrual basis rather than a cash basis, which enables
Insurance income for the first nine months of 2022 was KRW 4,524.1 billion, a minor decrease from KRW 4,929.4 billion in 2022.
Korean Re noted that the recognition of revenue on an accrual basis rather than a cash basis, which enables revenue to reflect the services rendered and exclude deposits, is one of the significant changes in the income statement based on IFRS 17.
The insurance P&L does not include investment components that are not distinct.
Additionally, adjustments have been made to the reinsurance commission accounting. Reduced appearance of revenue volume results from deducting fixed reinsurance commissions, which are set regardless of the occurrence of an insured event, from insurance revenue, the firm stated.
Korean Corn Dog
“Previously, they were treated as a business expense for,” Korean Re said as of right now for IFRS 4. Under IFRS 4, variable reinsurance commissions were likewise handled similarly; however, under IFRS 17, they are now acknowledged as a component of claims.
“Since claims and business expenses are recorded in profit or loss, the only impact on net income is due to classification.” current period as reported by IFRS 4. Although variable reinsurance commissions were handled similarly under IFRS 4, they are now included in claims under IFRS 17.
“There is only a classification impact and no effect on net income because both business expenses and claims are recognized in profit or loss.”
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