Gene Zhang, CEO of Peak Re North America, on casualty market dynamics and the carrier’s U.S. growth plans.

The U.S. casualty market has recently been characterised by differentiation, with results and underwriting approaches varying by line of business, cedants or historical experience. Adverse reserve development, social inflation, nuclear verdicts, litigation financing and emerging risks such as PFAS continue to be of concern.

The price hikes observed since 2019 might be moderating or plateauing after five years but are not yet softening for most casualty lines. According to our assessment, that is the longest hard market cycle we have seen in U.S. casualty history. While largely driven by inflation, the impact has been far from uniform.

WELL-DIVERSIFIED BOOK WITH SME FOCUS

Peak Re has written U.S. casualty business for nine years. The company pursues a strategy focused on frequency-driven rather than severity-driven business. As such, we focus on the SME segment across various areas of the casualty market. We aim to avoid or 
limit exposure to commercial auto, which has underperformed in recent years and registered significant losses.

Our personal auto book follows its own cycle. Between 2020 and 2022, following the COVID-19 pandemic, the market experienced significant inflation. However, subsequent steep rate increases mean the U.S. personal auto segment has performed strongly since 
late 2023.

In professional indemnity, Peak Re adopts a similar approach, reinsuring policies that cover the risks of small law firms. These companies typically do not handle the big-ticket legal cases. Thus, the indemnity policies of these firms are mostly limited to $2 million or less. Similarly, in medical malpractice, Peak Re concentrates on covering the risks of individual physicians rather than hospitals. Policy limits in this segment range from $1 million to $2 million, well below those seen for larger hospitals. Finally, in general casualty, we support primary general liability and excess casualty with a middle market focus.

LIMITED EXPOSURE TO MARKET VOLATILITY

Apart from the low treaty capacity – around $700,000 on average across our U.S. casualty book – these SME risks display lower volatility than the larger accounts. While losses are more confined, rate increases are also less pronounced. Thus, social inflation, which is highly prolific in commercial auto and hospital liability, has little influence on our book. Equally, our portfolio’s exposure to the impact from nuclear verdicts is minimal too.

Based on its solid performance, Peak Re’s book of business has steadily expanded over the past few years. We therefore decided to establish a subsidiary in Bermuda. In February 2025, the Bermuda Monetary Authority licensed Peak Reinsurance North America Ltd as a Class 3B insurer. This move demonstrates our commitment to the North American insurance market, allows us to further expand our footprint and to better serve our clients in the region.

The article was first published on The Insurer on 7 September, 2025. Please refer to the full article here.