Korean Re forms strategic alliance with Carlyle to explore co-insurance opportunities

- The companies agree to jointly explore developing and offering bespoke co-insurance solutions tailored for Korean primary insurance companies

- The combination of Korean Re’s network and Carlyle’s asset management and capital raising capabilities as well as client-centric solutions for complex insurance risks is set to create great synergies

Seoul, [August 4, 2020] - Korean Re today announced that the firm signed a Memorandum of Understanding (MOU) for a strategic alliance with The Carlyle Group, one of the largest global investment firms, on July 31. The companies have agreed to jointly develop solutions for Korean primary insurers relating to co-insurance and reserve acquisitions.

Co-insurance was introduced to the Korean market in the first half of this year to help primary insurers reduce and control insurance liabilities following the introduction of International Financial Accounting Standards 17 (IFRS17) and the new Korean-Insurance Capital Standards (K-ICS). Through co-insurance transactions, primary insurers are able to transfer risks associated with their insurance products, including interest rate risks, to reinsurers, thereby unlocking trapped capital for their shareholders.

Korean Re and Carlyle are planning to jointly develop solutions tailored for Korean primary insurers, and to collaborate on a wide range of areas, including product designing and structuring, reinsurance asset management, capital management and capital raising.

Founded in 1987 in Washington, DC, The Carlyle Group is a global investment firm with US$221 billion of assets under management.

Korean Re has been preparing for the introduction of co-insurance program in Korea since 2018, setting up a separate team specializing in co-insurance underwriting. The Carlyle Group has been expanding its capabilities in the insurance sector and acquired a 19.9% stake in Fortitude Group Holdings LLC, whose companies include Fortitude Re (formerly DSA Re), from AIG in 2018. Carlyle completed the acquisition of a majority interest in Fortitude Re on June 2 of this year.

Through this strategic alliance, Korean Re expects to steadily grow its reinsurance capacity, and to develop and offer differentiated co-insurance solutions, leveraging Carlyle’s asset management expertise, capital raising capabilities and Fortitude Re’s global reinsurance know-how. At the same time, Carlyle and Fortitude Re are well-positioned to further expand their asset management and reinsurance businesses, respectively, drawing upon Korean Re’s extensive customer network in Korea.