Fosun and IFC-backed Peak Re launches in Hong Kong
Peak Reinsurance, a new reinsurer established to capture the growing demand for modernised reinsurance solutions in Asia Pacific, has obtained formal authorisation to launch its underwriting operations with an initial capital of USD550m in Hong Kong.
Peak Re started its underwriting operations on 28 December 2012, the date on which the company was granted the formal authorisation and rated A- by AM Best Company, an international insurance industry credit rating agency.
The company is held by Fosun International, a company dedicated to becoming a premium investment group with a focus on China’s growth momentum, and the International Finance Corporation (IFC), the member of the World Bank Group focused on private sector development. They have respectively invested USD468.05m (85.1 per cent) and USD81.95m (14.9 per cent) in the company.
The management team of Peak Re is led by Franz Josef Hahn, co-founder and chief executive officer, and Eckart Roth, co-founder and chief underwriting officer. Both are seasoned reinsurance professionals, each with more than 20 years of experience in the regional and international reinsurance markets, and a proven track record for building up strong teams and successful reinsurance business.
“The strong financial and technical backing of Fosun and IFC has been critical in making Peak Re a reality. As top-quality founding shareholders, they provide a superb blend of support that we believe will enable Peak Re to develop in a competitive and sustainable manner,” says Hahn. “We believe that Hong Kong is an ideal location from which to build our business, given the city’s ready access to mainland China and other major markets in the region, excellent supply of talented reinsurance executives, and robust legal and regulatory systems.”
Headquartered in Hong Kong, Peak Re intends to become a leading Asia-Pacific reinsurer. With an initial focus on property and casualty treaty reinsurance solutions, Peak Re is specialised in developing modernised risk management solutions for the Asia-Pacific community.
Peak Re believes that Asia Pacific has been underinsured in general. For instance, in the aftermath of a series of natural catastrophes in Asia Pacific in 2011, including Thai flood, Tohoku earthquake and tsunami, New Zealand earthquake and Australian floods, less than 22 per cent of the total economic loss registered was insured, significantly below the ratio of insured loss to economic loss seen in the US and Europe in the same period, which stood at approximately 63 per cent and 50 per cent respectively. In 2010 China suffered its most devastating floods in a decade causing around USD50bn economic loss, of which only USD1bn was covered by insurance.
In cooperation with IFC and Fosun, Peak Re aims to enter into emerging Asian markets including China, India, and Indonesia in the next five years.
“Increased insurance coverage is important to sustainable business growth and private sector development,” says Serge Devieux, IFC’s Asia financial markets director. “We believe supporting the emergence of strong regional reinsurers such as Peak Re will enable local insurers to expand their products and services and reach more clients.”
- Special Reports