• Peak Re doubles gross written premium income to US$582.7 million in 2015
• Underwriting profit jumps to US$8.7 million
• Net income increases to US$59.2 million, up 42%

In 2015 Peak Reinsurance Company Limited (“Peak Re” or the “Company”) made further progress in developing into a truly global reinsurer. Thanks to the Company’s well diversified and balanced portfolio its gross written premium income increased by 102% to US$582.7 million. In the third year of operation, Peak Re delivered an underwriting profit of US$8.7 million, at a combined ratio of 96.8%. Net income grew by a substantial 42% to US$59.2 million, despite a challenging investment environment.

Commenting on the Company’s performance, Chief Executive Officer, Franz Josef Hahn said: “2015 was a successful year for Peak Re. We demonstrated the validity of our lean and efficient business model by significantly growing our book of business in a tough market environment. Peak Re delivered strong results on all fronts. Our premiums doubled, which testified the strengthening of our client franchise, both by expanding geographically and line of business, as well as developing larger shares and new business from existing clients. In addition, we started to replicate our successful Asia Pacific market approach in Europe and the Americas, by building our Zurich branch and our strategic investment of 50% stake into Caribbean insurer, NAGICO. The transaction is currently pending final regulatory approvals. Equally important, Peak Re’s uncompromising focus on technical excellence yielded a good underwriting profit and a further substantial reduction of our cost ratio.”

The business environment in 2015 was challenging. The world economy slowed markedly, both in mature and, more severely, in some major emerging markets. The weakening was accompanied by increasing financial market volatility in the second half of the year, with Asia being particularly affected. In addition, political risk, including a rising tide of protectionism, continued to heighten. In global underwriting markets, we are yet to see trends of improving trading conditions across most geographies and lines of business. Last but not least, additional technology and insurtech competitors forcefully entered the market place. Their impact is already felt in retail markets where they have started disrupting incumbents based on product design and service delivery. Over time, the reinsurance sector will feel the effect, too, as these disruptors adopt entirely new approaches to risk transfer and diversification. Peak Re, as a reinsurer that is committed to investing in technology, is already taking necessary actions to ensure the company is fully equipped to cope with this new challenge.

Strong profitable growth

In this demanding environment Peak Re grew its gross written premiums to US$582.7 million, up 102% year-over-year. Premium growth was driven by larger shares gained and new business from Peak Re’s core Asia Pacific markets, the Company’s geographical expansion into Europe and the Americas, as well as its entry into new lines of business such as life and casualty reinsurance. Net written premiums increased to US$564.2 million, up 102% from US$279.7 million in 2014.

In 2015, Peak Re doubled its technical underwriting profit to US$30.8 million, delivering a net underwriting income of US$8.7 million. The technical combined ratio remained at 92.0%. Peak Re’s strong technical results demonstrate its focus on underwriting excellence and the Company’s firm commitment to profitable growth.

In tandem with the Company’s strong technical performance, Peak Re reduced its expense ratio to a very competitive 4.8%, after 9% in 2014. Total administrative expenses were US$22.1 million, as compared to US$17.2 million in 2014.

Weathering turbulent financial markets, in particular in Asia, Peak Re achieved a return on investment of 6.4%, representing an investment income of US$56.3 million, a slight increase from the US$55.6 million recorded in 2014. Investable assets increased by 17% from US$781.5 million to US$913 million. During 2015, Peak Re steadily reduced its equity exposure of investable portfolio to 34% while increasing the share of fixed-income securities to 39%. 19% of the Company’s assets were held in cash and bank balances and the remainder of 8% in alternative investments.

Peak Re’s net income increased by more than 42% to US$59.2 million, from US$41.6 million in 2014. In line with the long-term commitment from both shareholders, Fosun with a shareholding of 85.1%, and the International Finance Corporation (IFC) with a stake of 14.9%, Peak Re will retain its earnings to help grow the business. Shareholders’ equity grew to US$716.9 million, compared to US$688.4 million in 2014.

As of 31 December 2015, Peak Re wrote business with close to 300 cedants in almost 50 countries. The Company’s portfolio improved substantially, in terms of breadth and diversification, reflecting successful execution of its product and geographical expansion projects. Asia Pacific remains Peak Re’s core and largest market which contributed 58.2% of the total portfolio in 2015, whereas EMEA and the Americas, which comprise Caribbean, North, Latin and Central Americas, accounted for 13.1% and 28.7% respectively.

The opening of the branch office in Zurich in September 2015 had a limited impact on European business written in the past year, but significantly more traction expected in 2016. The Company also expects more business cooperation and opportunities with Caribbean insurer NAGICO in 2016 once all the final regulatory approvals are received.

Outlook for 2016

The Company had a good start in 2016. In January Peak Re grew the renewable book by 60% from US$211 million to US$337 million. The Company recorded significant growth in China and South-East Asia. In Thailand, for example, the Company also benefits from its access to business developed as a result of the trust built with clients who have sought individual solutions. For the full year 2016, Peak Re expects further profitable growth. Asia Pacific will continue to be its core market while diversification into Europe and the Americas markets progresses according to plan.

About Peak Re

Peak Re is headquartered in Hong Kong with shareholder funds of US$716.9 million as of December 31, 2015. It is authorized by the Office of the Commissioner of Insurance of Hong Kong and is rated “A-” by A.M. Best, a leading international insurance industry credit rating agency. The Company is backed by Fosun International Limited (HK.656) and the International Finance Corporation, member of the World Bank Group, who have respectively invested 85.1% and 14.9% in the Company. Peak Re offers reinsurance treaty services covering a range of lines across Asia Pacific, EMEA and the Americas, tailor-making risk transfer and capital management solutions to best fit clients’ needs.