Korean Re Accelerates Climate Crisis Response ESG Strategy... "Proactive Risk Management"

CAT Modeling, Industry-Academia-Research Collaboration, and Coal Divestment Declaration
"By 2050, Proportion of Coal Reinsurance Underwriting to Decrease by 94% Compared to 2023"

Korean Reinsurance Company (Korean Re) announced on the 27th that it is fully implementing its environmental, social, and governance (ESG) strategy across the entire organization. It views climate change as a key variable affecting the profitability and stability of reinsurers and is proactively managing the associated risks.

Korean Re explained that it is strengthening a sustainable reinsurance model through sophisticated climate risk analysis, portfolio transition, and industry-academia-research collaboration.

To respond to the physical impacts of climate risk, Korean Re is enhancing its CAT (catastrophe) modeling capabilities. To address major disaster risks, it operates a specialized CAT modeling team composed of PhD-level natural disaster experts. They accurately calculate risk factors from natural disasters such as typhoons and earthquakes and ensure that the financial impact related to climate risk does not exceed risk limits.

Korean Re is also actively engaged in industry-academia-research collaboration. It is conducting joint research to develop quantitative risk models together with a climate risk convergence research team. They plan to create quantitative models based on future climate change scenarios.

The research team consists of convergence researchers from engineering, basic sciences, and finance fields from three universities and four research teams. Their goal is to quantify and manage the financial impact of climate risks through scenario analysis and stress testing of floods, typhoons, droughts, and other climate change-related events.

Korean Re is expanding its research platform to enhance expertise in climate risk management. In 2022, it jointly launched the "Climate Risk Management Task Force (TF)" with the Korean Risk Management Society and held 12 monthly forums. It continues academic support through research grant competitions and sponsors annual regular academic conferences and international seminars.

Korean Re declared a coal divestment policy in 2022. It is practicing sustainable management at the corporate level and reducing the proportion of coal-related businesses. In 2023, it completely halted new investments and facultative reinsurance underwriting related to coal mining and coal-fired power plants. It plans to strive for carbon neutrality by 2050. Accordingly, it expects to reduce the proportion of coal-related reinsurance underwriting by more than 94% compared to 2023 by 2050.

A Korean Re official stated, "We will proactively manage climate risks based on strengthened CAT modeling capabilities and an ESG-centered management strategy."

This content was produced with the assistance of AI translation services.