Korea National Insurance Corporation (KNIC), founded in 1947 is a recognized insurer of the Democratic People's Republic of Korea with 70 year's history of insurance business.
The Corporation, mainly carries on both life and non-life insurance business in the territory of the DPR Korea.
The Corporation, headquartered in Pyongyang, the capital city of the DPR Korea, involves about 10 provincial insurance branches and over 200 insurance branch offices at municipal, district and country levels thereunder across the country.
In addition to the insurance business, the Corporation conducts other business activities like information technology service, shipping and financial investment.
The Corporation carries out all its business operations under the guidance and supervision of the State Insurance Committee in compliance with the Insurance Law and the relevant regulations of the State.
In order to meet the growing demand for insurance coverage in proportion to the ever-revitalizing national economy, KNIC tries its best to have its underwriting scopes more diversified and its undertakings more upgraded on a sophisticated IT basis.
On 10th July 2017 the Corporation greeted its 70th anniversary of foundation.
And a conference was held in KNIC to commemorate the 70th anniversary at which the executives, staffs together with the representatives from branch offices in each province were in attendance.
This was a great event in KNIC's 70-year-long history having reviewed its glorious path and outlined new strategic tasks for its development in the future.
As befits the practical condicion where mighty foundations of a thriving nation are being laid down, KNIC shall be constently committed to its reponsibility and duty in protecting people's life and property and promoting the development of the national economy, as has it been in the past years.
The year 2017 was a year of heroic struggle and great victory, a year when we set up an indestructible milestone in the history of building a powerful socialist country with the spirit of self-reliance and self-development as the dynamic force.
Our service personnel and people build magnificent Ryomyong Street and large-scale livestock farming base in the Sepho area, and completed the task for the first stage of the forest restoration campaign, thereby demonstrating the might of great army-people unity and the potential of the socialist independent economy.
Amid a vigorous struggle for the creation of the Mallima speed, new model units emerged one after another, and a large number of factories and enterprises fulfilled theri quotas of the yearly national economic plan ahead of schedule and made a proud achievement of supassing their peak-year levels.
Last year the Korea National Insurance Corporation made a great contribution to the stable development of the national economy and the improvement of people\\\\\\'s living standard and achieved a net profit of KPW 7 149.9 million in its overall operation.
During the period under review the Corporation wrote gross premiums of KPW 46 700.3 million, down 6.95% from the preceding fiscal year, achieving the underwriting result of KPW 8 749.8 million in the insurance business.
The Corporation conducted the works with ultmost responsibility and trust to pay in time the losses from unexpected drought in vanguard sectors, basic industries and agriculture which had been advancing vigorously to implement the five-year strategy for the national economic development put forward in the 7th congress of the Worker\\\\\\'s Party of Korea.
The Corporation upgraded its operations to a more scientific and sophisticated IT basis by launching homepage "Skyline" while endeavoring to develop new insurance products as required by developing reality and achieved noteworthy progress.
In the period under review the Corporation achieved the gross income of KPW 4 173.4 million, down 10.62% from the preceding year in investment by establishing management and enterprise strategy for the revitalization of investment activities in finance, information technology, shipping, join venture and cooperation and putting business on an IT and scientific footing in keeping with requirements of IT era, and recorded a KPW 3 750.0 million profits.
The year 2018 is a year of great significance which marks the 70th anniversary of the founding of our Republic and the third year of implementing the five-year strategy for national economic development when a breakthrough sould be made in reenergizing the overall economic front.
Under the stirring environment where all economic sectors are developing rapidly by dint of science and technology and an upturn in improving the people\\\\\\'s living standars and building an economic giant will be brought about with a maximum use of the existing foundation and all potentials of the self-supporting economy, the Corporation will credibly ensure a stable development of the national economy with more scientific and rational business strategy and achieve a rise in premium income by further improving its insurance service.
On behalf of Executive Committee of Management, on this occasion, I would sincerely like to extend my thanks to all staff within the Corporation who actively contributed to its business development during the period under review. I would also extend my thanks to overseas business partners and international insurance organizations for their unreserved cooperation with the KNIC, wishing them all further success in 2018.
Hong Myong Ryong
Chairman of Executive Committee of Management
Korea National Insurance Corporation
Executive Committee of Management (ECM) is the top managing body of Korea National Insurance Corporation.
It assumes the duty to examine and determine all such matters as business strategy, operational philosophy and accounting rules and to monitor implementation thereof.
It is also responsible for the overall operational business of KNIC.
The ECM consists of experienced and competent officers, who have been working with the Corporation for many years.
Hong Myong Ryong
(Chairman of ECM)
As an expert in insurance and law, he has been working as Chairman since 2014.
(Deputy-Chairman of ECM)
As an expert in insurance and law, he has been with the Corporation since 1983.
Han Yong Gyu
(Deputy-Chairman of ECM)
As an expert in insurance and economics, he has been with the Corporation since 1988.
Kim Chol Yong
(Member of ECM)
As an expert in finance, he has been working for the Corporation since 1999.
(Member of ECM)
As an expert in insurance and economics, he has been with the Corporation since 1994.
The mission of Korea National Insurance Corporation (KNIC) is to provide life and non-life insurance covers to institutions, enterprises, cooperatives and individual citizens within the territory of the DPR Korea.
As befits its corporate mission, KNIC has the specific departments dealing with life and non-life insurance and other complementary divisions at its head office, as well as insurance branch offices at different levels across the country under it.
The major operational departments at the head office are as follows:
Property Insurance Department is in charge of non-life insurance classes, such as property, crop, livestock, engineering and motor applied from institutions, enterprises, cooperatives and individual citizens.
Marine Insurance Department handles such lines as marine hull, cargo and liability, aviation hull and liability applied from institutions, enterprises and cooperatives.
Life Insurance Department provides life and personal accident coverage applied from institutions, enterprises, cooperatives and individual citizens.
Economic Cooperation Insurance Department offers different classes of insurance to economic development zones including Rason Economic and Trade Zone and foreign invested enterprises(foreigners, foreigner\'s independent enterprises, joing ventures, representative offices, correspondenet branch offices, embassies and international organizations).
Reinsurance Department organizes reinsurance protection for primary insurance accounts written by KNIC. It also writes various reinsurance businesses from (re)insurance companies abroad.
Investment Department conducts investment activities for financial securities and mining, and manages non-insurance enterprises like a shipping company.
Besides, there are other complementary divisions like Market Research, Insurance Cooperation, Finance & Accounting, Administration and Protocol, all of which are engaged in their respective functions.
KNIC, as a recognized insurer of the DPR Korea has about 10 provincial insurance branches and 200 insurance offices at municipal(district) and country levels under it, as well as representative offices oversea.
|Gross Premiums Writters||2017||2016||2015|
|Life||28 478||29 906||28 884|
|Property||3 992||4 548||7 104|
|Agriculture||3 535||4 561||4 631|
|Marine & Aviation||3 785||3 986||3 921|
|Engineering||3 841||4 069||3 697|
|Personal Accident||2 658||2 682||2 683|
|Net Loss Ratio%||2017||2016||2015|
|Marine & Aviation||67.77||71.08||69.38|
|Net Expense Ratio%||2017||2016||2015|
|Marine & Aviation||15.29||16.63||14.93|
|Net Combined Ratio%||2017||2016||2015|
|Marine & Aviation||83.06||87.81||84.31|
During the year under review, as the general economy of the country is begin revitalized and the demand for fund from organs and enterprises is increasing, the Corporation directed much efforts to its investment business including loan, recording the net profits of KPW 3 575.0 million in the investment business.
The IT service company under the Corporation produced KPW 806.4 million of net profits by means of the development and the sale of software, e-mail service and other IT-related services for foreign and local clients.
Other investment activities including the shipping business made a net positive result of KPW 218.8 million.
The financial investments and the loan business recorded the profits of KPW 1 601.1 million in security trading and KPW 921.7 million respectively.
In 2018, the Corporation will continue to put greater efforts on the IT-related services, the shipping and the financial investments for higher incomes.
|Investment||82 236||80 099||75 805||70 325||60 421|
|Earnings||3 575||3 985||3 817||3 632||3 358|
Last year, KNIC managed its insurance operation in a meticulous way, thus producing certain fruitful business result.
During the year under review, the non-life insurance operation wrote gross premiums of KPW 18 222.0 million, down 10.15% from the preceding fiscal year, with net written premiuyms of KPW 18 095.5 million, down 0.96%. Net earned premiums amounted to KPW 17 771.6 million, down 9.19%. The non-life insurance sector recorded net underwriting profits of KPW 3 324.1 million.
The agricultural account grossed premiums written of KPW 3 535.3 million, down 22.49% from the previous year, resulting in 53.06% of a combined ratio and net underwriting profits of KPW 1 493.6 million.
The property portfolio wrote gross premiums of KPW 3 992.3 million, down 12.23% from the preceding year with 95.38% of a combined ratio and net underwriting profits of KPW 202.5 million.
The engineering line wrote gross premiums of KPW 3 840.7 million, down 5.61% with a combined ratio of 75.38% and net underwriting profits of KPW 939.7 million.
The personal accident account recorded gross written premiums of KPW 2 658.1 million, down 0.89% from the previous year with a combined ratio of 96.12% and net underwritin gprofits of KPW 93.3 million.
The marine and aviation account wrote gross premiumns of KPW 3 784.5 million, down 5.05% with a combined ratio of 83.06% and KPW 635.5 million of net underwriting profits.
Other non-life classes achieved gross premiums of KPW 411.1 milion, down 5.28% from the preceding year with a combined ratio of 86.66% and net underwriting profits of KPW 59.4 million.
During the fiscal year under review, the life insurance accounts wrote gross premium of KPW 28 478.3 million, down 4.77% from the previous year, with the net earned premium of KPW 31 616.0 million, up 2.19%.
It recorded net underwriting profits amounting to KPW 5 425.8 million.
|Gross premiuims written||18 222||20 280||22 473||21 880||21 628|
|Underwriting results||3 324||1 343||3 005||4 495||6 379|
|Gross premiums written||28 478||29 906||28 884||28 614||27 701|
|Net earned premiums||31 616||30 939||28 399||30 934||24 540|
|Underwriting results||5 426||8 447||6 080||9 791||1 533|
The KNIC will make active efforts to achieve better business results in 2018 by strictly applying the principle of carefully writing risks and ensuring that clients enhance their risk management.
Themed as 《Marine INsurance & Reinsurance: the Challenges of the Time》, an international seminar took place in Pyongyang, the Capital of DPR Korea from 7th to 9th June 2010, under the co-auspices of Korea National INsurance Corporation (KNIC) and the Federation of Afro-Asian Insurers & Reinsurers (FAIR).
The seminar was held in accordance with the determination taken by the Federation of Afro-Asian Insurers & Reinsurers in its 21st Conference in Kuala Lumpur, Malyasia in October 2009.
Present at the Seminar were 111 delegates from home and abroad, including Mr. Ezzat Abdel-Bary, Secretary General of FAIR and those from 74 companies and institutions of 21 countries of Asia, Africa and Europe, representatives of diplomatic corps, economic and trade missions, and international organizations in DPR Korea, underwriters of KNIC and other persons concered at home.
At the Seminar, prominent foreign and local underwriters and other personalities presented papers on the globally current insurance issues.
The forum provied a good platform to seek and share ways and means for the healing of the unstable insurance sector in the aftermath of global financinal crisks.
Marine Cargo Insurance Indian Market Experience
Chief Manager, Marine Cargo Technical Department, The New India Assurance Company
Marine Cargo Clains in China
Director, FAIRICC SURVEY AND LOSS ADJUSTING CO LTD
Marine Cargo Insurance in DPR Korea
Kang Sun Il
Managing Director, Korea Nation Insurance Corporation
Marine Cargo Claims & Adjustment - An Overview
Director, J.B.Boda Surveyor PVT.Ltd
Cargo Insurance & Reinsurance-London's Position in a Global market
Director, Cooper Gay & Co.Ltd - Marine & Aerospace Division
London Cargo Market
Director, Alsford Page & Gems Limited
The Art of Adjusting Catastrophe Claims
European Regional Director, Cunningham Lindsey
Director, Cunningham Lindsey
Controlling Piracy Risk Problems - the Role of International Community, Goverment and Ship Owners
Director, Sun Reinsurance Brokers LLC.
China Insurance Market
Alan Zhang Yong
Managing Director, Founding Partner, Continental Insurance Brokers Ltd
New Trends in the Reinsurance Market
Solicitor, Elborne Mitchelle
Alternative Reinsurance Product
Executive Vice President, HAAKON LTD.
In Pyongyang, the capital of DPR Korea, the Pyongyang INternational Insurance Seminar on 《The Dynamics of Insurance Coverage Arrangement and Rate Application Responding to Recent Catastrophes and Disasters》 was held from 12nd to 14th June 2012 under the co-auspices of Federation of Afro-Asian Insurers & Reinsurers (FAIR) and Korea National Insurance Corporation (KNIC).
This seminar is in accordance with the decision of FAIR 22nd General Meeting.
Present at the Seminar are a lot of delegates from home and abroad, including the delegates of FAIR member and non-member companies, delegates from insurance, reinsurance and broking companies of Asia, and Europe, representative of diplomatic corps, economic and trade missions, and the international organizations in DPR Korea and insurers of KNIC and other professionals of related bodies at home.
At the Seminar competent foreign and local figures and experienced underwriters presented valuable papers concering the globally current issues like the catastrophes insurance business.
This forum was a good chance for all delegates and participants to share their knowledge and experiences acquired in healing the aftermath of global financial crisis and seeking solutions to the challenges of the nature disasters and to tighten business relationship with each other.
Earthquake and relevant insurance in China
Henry Zhang, FAIRICC Survey & Loss Adjusting Co., China
The Opportunities of Emerging Reinsurance Market
Dmitry Shaydulin, "Glinso-Insurance Brokers" L1c, Russia.
Arbitration Clauses in International Arbitration Contracts
Tim Akeroyd, Elborne Mitchell LLP, UK
The worldwide agricultural re/insurance market
Karl Josef Schneider, Novae Re, Switzerland
General Principles Relating to the Conduct of Loss Surveys and Claim Adjustments Following Catastrophic Events from a Crop Insurance Perspective
Brent Alexander Demnar, Agri Business Consulting Group, Australia
Contingent Business Interruption Following Catastrophe
Robert Edward Dalton, Cunningham Lindsey International, UK
|Gross Written Premium||46 700||50 186||51 357||50 495||49 329|
|Investment Revenues||4 173||4 669||4 465||4 260||4 197|
|Pre-Static Payment Result||10 592||12 148||11 704||17 043||10 549|
|Profit for the year||7 150||8 200||7 900||11 504||7 121|
|Investment||82 236||80 099||75 805||70 325||60 421|
|Net Worth||103 768||96 588||88 388||80 049||68 471|
|Net Underwriting Provisions||41 965||44 804||47 296||46 759||47 943|
|Combined Ratio Non-life%||81.8%||93.2%||85.3%||76.5%||62.1%|
|1||Intangible Assets||1 431.0||1 212.7||1 027.9|
|2||Tangible Assets||13 778.9||12 766.7||11 723.2|
|3||Investments||82 235.6||80 098.6||75 804.7|
|1)||Real Estate||6 091.4||5 201.4||4 314.9|
|2)||Investment in Affiliated Enterprises||3 100.7||4 551.4||3 845.1|
|3)||Loans||36 145.6||34 663.8||33 242.6|
|4)||Securities||36 897.9||35 682.0||34 402.1|
|4||Ceded share of underwriting provisions||55.5||787.6||531.8|
|5||Receivables||3 867.2||3 683.0||3 507.6|
|6||Cash with Bank & in hand, cheques||46 740.8||45 904.0||45 823.3|
|7||Other Assets||1 075.2||1 018.6||959.1|
|Total Assets||149 184.0||145 471.1||139 377.7|
|№||Net worth & Liabilities||2017||2016||2015|
|1||Net Worth||103 738.3||96 588.4||88 388.4|
|1)||Paid-up Capital||4 750.0||4 750.0||4 750.0|
|2)||Retained Earnings||88 934.2||80 872.6||73 104.0|
|3)||Other reserves||2 904.1||2 765.8||2 634.1|
|4)||Consolidated Profits||7 149.9||8 200.0||7 900.3|
|2||Groww Underwriting Provisions||42 020.4||45 591.8||47 827.4|
|1)||Unearned Premiums||39 617.0||43 123.2||45 220.4|
|2)||Provisions for Future Benefits||1 028.4||1 146.7||1 184.2|
|3)||Provisions for Outstanding Claims||817.2||681.6||762.1|
|4)||Other Underwriting Provisions||557.7||640.3||660.7|
|4||Other Accrued Liabilities||1 259.2||1 213.3||1 169.1|
|5||Other Liabilities||1 047.9||998.0||950.5|
|6||Other Defereed Items||162.9||159.2||155.7|
|Total Net worth & Liabilities||149 184.0||145 471.1||139 377.7|
|1||Net earned premiums||49 387.6||50 508.4||48 730.9|
|2||Investment result||4 173.4||4 669.3||4 465.3|
|Total Income (1+2+3)||53 652.4||55 270.2||53 289.4|
|4||Net expenses for claims & benefits||33 605.0||33 393.0||32 483.6|
|5||Net operating expenses||7 631.2||8 008.7||7 810.7|
|6||Other expenses||1 823.7||1 720.5||1 290.9|
|Total expenses (4+5+6)||43 059.9||43 122.2||41 585.2|
|7||Operating result before payment to state||10 592.5||12 148.1||11 704.2|
|8||Payment to state||3 442.6||3 948.1||3 803.9|
|9||Profit for the year||7 149.9||8 200.0||7 900.3|
|-||Cash from operating activities||9 533.8||11 330.9||13 670.2|
|-||Payment to state||3 442.6||3 948.1||3 803.9|
|-||Net cash from operating activities||6 091.2||7 382.8||9 866.4|
|-||Net cash from investing activities||-5 254.4||-7 302.1||-6 973.8|
|3||Increase/decrease in cash||836.8||80.7||2 892.6|
|4||Movement in cash|
|-||At beginning of year||45 904.0||45 823.3||42 930.7|
|-||Net cash inflow/outflow||836.8||80.7||2 892.6|
|-||At end of year||46 740.8||45 904.0||45 823.3|
Consolidated financial statements of Korea National Insurance Corporation (KNIC) have benn prepared in accordance with the requirements of Accounting Law and its relevant regulation of the DPR Korea and the accounting principles generally accepted in the country. They have been prepared in Korea Won under historical cost convention on an accrual and a going-concern basis.
An accounting year for Korea National Insurance Corporation and its subsidiary undertakings is from 1st January to 31th December each year.
The consolidated financial statements show their assets, liabilities and results for the accounting period.
All intercompany transactions under KNIC are not reflected in the consolidated financial statements.
KNIC follows a principle that a method once chosen should be applied consistently in applying methods of recognition, measurement and disclosure.
The subsidiary bodies are those that directly belong to and are directed and controlled by KNIC over their operations. The subsidiaries are consolidated from the date on which effective control thereon is transferred to KNIC and are no longer consolidated from the date of them begin taken over to other institution.
When a subsidiary enterprise is transferred to KNIC, all its assets and liabilities that exist at the date of its attachment are recorded at their book values of the date. Profits earned by the subsidiaries are included in consolidated profits of KNIC for the year.
Annual financial statements of the consolidated subsidiaries are based on uniform accounting and valuation principles.
We have audited the consolidated financial statements consisting of Balance Sheet, Income Statement and Cash Flow Statement prepared by Korea National Insurance Corporation (KNIC) for the accounting year from 1st January to 31th December 2017.
The preparation and the content of the consolidated financial statements in accordance with the generally accepted accounting principles in the DPR Korea are the responsibility of KNIC Executive Committee of Management.
Our responsibility as independent auditors is to express an opinion of the financial statments based on our audit.
We have audited the consolidated financial statements in accordance with the generally accepted auditing standars for financial statements sent down by the Ministry of Finane, the DPR Korea. Those standars require that auditors plan and perform an audit in a way to be able to assess with reasonable assuarance whether the consolidated financial statements are free of material misstatement.
The evidence supporting the amounts in the consolidated financial statements was examined on a test basis within the framework of the audit. Our audit included assessing the used accounting principles and significant estimates made by the Executive Committee of Management, as well as evaludating the overall presentation of the conoslidated financial statements. We believe that our audit provided a resonable basis for our opinion.
In our opinion, the audited consolidated financial statements give a true and fair view of net assets, financial position, results of operations and cash flows of the NIC as at 31th Dec 2017 in accordance with the generally accepted accounting principles prevailing in the DPR Korea.
Pyongyang 14th March 2018
Han Myong Il, Director, Auditing Office, DPR Korea
O Un Hyang, Manager, Auditing Office, DPR Korea