A dispute has erupted between Swiss Re and domestic primary insurers over construction insurance for the Sinan Ui offshore wind project, which carries a construction cost of 2.64 trillion won.
When initial terms proposed that 90 percent of total risk be ceded to the reinsurance market, domestic insurers demanded an expansion of their retained share. After mediation by KB Kookmin Bank, the financial arranger, the domestic insurers' retained share was raised from 10 percent to 20 percent.
According to the reinsurance industry on Oct. 1, the Sinan Ui offshore wind power project is a large-scale project with construction costs of 2.64 trillion won, and the construction insurance rate stands at approximately 1.18 percent. The project involves developing a 390MW offshore wind farm near Ui Island in Docho-myeon, Sinan County, South Jeolla Province. It is counted as a major offshore construction project that will install 26 units of 15MW offshore wind turbines.
Construction projects conducted at sea, such as ports, breakwaters and offshore wind farms, are classified as "wet risk" items because accidents can result in large losses. This is why the insurance premium for the Sinan Ui offshore wind power plant is calculated to be significantly higher than for onshore projects of the same construction cost.
Hanwha P&C Insurance serves as the lead underwriter for primary insurance. The syndicated underwriting shares are KB P&C Insurance at 27 percent, Samsung Fire & Marine Insurance at 25 percent, and Hanwha P&C, Hyundai Marine & Fire Insurance and NH Agricultural Cooperative Insurance each at 16 percent. Each insurer assumes risk according to its respective share, cedes some of it to reinsurers and retains the remainder.
Swiss Re is understood to have led the reinsurance underwriting. Among global reinsurers, Swiss Re is a company that has demonstrated strength in the domestic offshore wind insurance market, along with Munich Re, Scor and Allianz. Lockton, Willis and UIB Korea participated in insurance brokerage operations.
Initial dispute over reinsurance terms
The controversy arose when initial reinsurance cession terms were presented at around 90 percent. Under these terms, domestic insurers would retain only 10 percent of the risk they had jointly underwritten and cede the remainder to the reinsurance market.
As a result, KB Kookmin Bank, the financial arranger, recently stepped in to mediate. It called in three insurance brokerage advisory firms and proposed readjusting the domestic insurers' retained share. Following this, the domestic insurers' retained share, which had been around 10 percent after cession, increased to around 20 percent.
Global reinsurers' dominance in large marine projects
Even domestically, global reinsurers often lead on rates, compensation terms and cession structures in large marine construction insurance. This is because they possess accident experience and statistics for relevant industries and have the capital to assume large-scale losses that can result from a single accident.
The industry argues that a practice exists in which other global reinsurers do not actively participate in deals where a particular reinsurer takes the lead. Even when multiple reinsurers participate in bidding, if substantive rate competition is limited, the negotiating power of domestic insurers and project owners can be weakened.
One reinsurance industry official said, "The structure of domestic offshore wind insurance is becoming fixed with Swiss Re leading, and there is a practice where other overseas reinsurers do not actively enter deals led by a particular reinsurer, making it difficult for proper competition to take place."
Meanwhile, Hanwha Ocean is participating as a major shareholder in the Sinan Ui offshore wind project. While Hanwha P&C Insurance serves as the lead underwriter for primary insurance, KB P&C Insurance, which belongs to the same financial group as KB Kookmin Bank the financial arranger, holds the highest syndicated underwriting share at 27 percent.
Original Korean article: kbanker.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
KWI developer profile — Hanwha Ocean
4 projects in Korea totalling 1,730 MW. Compiled from the KWI database. Not part of the source article.
Sinan Ui Offshore Wind — this article
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ChilHae 1 Offshore Wind
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ChilHae 2 Offshore Wind
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Boryeong Nokdo Offshore Wind
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- Sinan-Ui offshore wind support may burden taxpayers with REC costs — 2026-10-07
- Sinan-Ui offshore wind taps Vestas turbines despite domestic growth fund mandate — 2026-09-23
Project data: KWI database — Electricity Business Licence records, EIA filings (ME2021C012, ME2026C003, ME2026C014), Electricity Regulatory Commission minutes, and pre-EBL permit filings.
