Korean Re Launches Internal Model Development Project for Insurance Risk Calculation
[Asia Economy Reporter Oh Hyung-gil] Korean Re announced on the 27th that it will start a project to build an internal insurance model for precise insurance risk calculation.
The new solvency regime (K-ICS) introduced in 2023 changes the liability measurement method from a 'cost' valuation method to a 'market value' valuation method. In addition, it adopts a principle-based guideline that measures risk reflecting the characteristics of each company, fundamentally aiming for an internal model.
An internal model refers to the approach used by European reinsurers who adopted the market value-based 'Solvency II' since the early 2000s, characterized by calculating the company's risk amount precisely by reflecting each company's unique characteristics.
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Korean Re also plans to complete this internal insurance model building project by the end of January next year to calculate the company's inherent risk amount and actively secure competitiveness in the global market by utilizing it.
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