Hong Kong, 20 October 2023 – Peak Reinsurance Company Limited (“Peak Re” or the “Company”), a Hong Kong-based global reinsurer, announced today that AM Best has affirmed the Financial Strength Rating of A– (Excellent) and the Long-Term Issuer Credit Rating of a– (Excellent) of Peak Reinsurance Company Limited in Hong Kong and its subsidiary in Switzerland. AM Best also maintained the Company’s negative outlook.
Peak Re’s business fundamentals remain stable, underpinned by a very strong balance sheet
In the opinion of AM Best, Peak Re’s business fundamentals remain stable, with a very strong balance sheet strength, adequate operating performance, neutral business profile and appropriate enterprise risk management. Other factors supporting Peak Re’s balance sheet strength include good financial flexibility to access traditional and alternative capital markets, an overall prudent investment risk profile, a comprehensive retrocession programme and strong liquidity.
As of 30 June 2023, Peak Re maintained net assets of USD1.3 billion and a solvency ratio of 287%[1]. Peak Re recorded a strong first-half business result, demonstrating the success of ongoing efforts to rebalance and improve the underwriting and investment portfolios while optimising capital allocation. The Company reported a record net profit after tax of USD160 million in the first six months of 2023 (as of 30 June 2023) alongside an excellent property and casualty (“P&C”) combined ratio of 82.2%[2].
Franz-Josef Hahn, CEO of Peak Re, said: “We have built a resilient and high-quality P&C portfolio, carefully diversified across lines and geographies, and our life and health (“L&H”) business continues to be a reliable contributor to our reinsurance success and a further element of diversification. With the prevailing tailwinds of robust reinsurance demand and strengthening of P&C pricing, I am confident of Peak Re’s success in the upcoming 2024 P&C business renewals and beyond. AM Best’s reaffirmation of our A- rating is a strong endorsem*nt of the accomplishments of Peak Re over the past 12 months. Most importantly, it reassures our business partners of Peak Re’s very strong capital and liquidity positions, which are core elements of our value proposition.”
AM Best maintained the Company’s negative outlook, reflecting the rating agency’s lingering concern over potential contagion risk in case of adverse credit event at the company’s majority shareholder, Fosun International Limited. Nonetheless, the rating agency recognises the strong ring-fencing measures in place with the Company. In particular, Peak Re has demonstrated a strong track record of effectively mitigating any potential contagion risk stemming from Fosun’s weaker credit fundamentals.
Link to AM Best’s press release on Peak Re’s rating: [this link]
[1] All first-half 2023 figures of the Company (as of 30 June 2023) are based on IFRS 17 and IFRS 9. The solvency ratio of Peak Reinsurance Company Limited is based on the requirements pursuant to the Hong Kong Insurance Ordinance (Cap.41) as of 30 June 2023.
[2] The “P&C combined ratio” refers to the combined ratio for the property and casualty (“P&C”) business of the Company, which is calculated as 1-“reinsurance result” divided by “reinsurance revenue after retrocession premium paid”.
