Peak Re is launched in Hong Kong to tap into the underserved reinsurance markets in Asia Pacific
Peak Re is launched in Hong Kong to tap into the underserved reinsurance markets in Asia Pacific, backed by Fosun and IFC
Peak Reinsurance Company Limited (“Peak Re” or “the Company”), a new reinsurer established to capture the growing demand for modernised reinsurance solutions in Asia Pacific, announces that it has successfully obtained the formal authorization by the Office of the Commissioner of Insurance of Hong Kong, with a territorial scope encompassing the Asia-Pacific region, to launch its underwriting operations with an initial capital of US$550 million in Hong Kong.
Peak Re started its underwriting operations on 28 December 2012, the date on which the Company was granted the formal authorization and rated A- by A.M. Best Company, a leading international insurance industry credit rating agency.
The Company is held by Fosun International Limited (“Fosun”) (HKEx Stock Code: 00656), 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, who have respectively invested US$468.05 million (85.1%) and US$81.95 million (14.9%) in the Company.
The management team of Peak Re is led by Mr. Franz Josef Hahn, co-founder and Chief Executive Officer and Mr. 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,” said Mr. 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 that brings together world-class reinsurance experience, as well as profound market understanding and geographic proximity to the region. 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.
“We believe that the management team of Peak Re will shape the company into a leading modernised reinsurer that is worthy of long-term investment in the Asia-Pacific region,” said Mr. GUO Guangchang, Chairman of Fosun and Director of Peak Re. “Together with Fosun’s other insurance projects, we believe our investment in Peak Re will create an anchor revenue stream from the insurance business to support our investment activities and steadily making inroads to establish Fosun as ‘a premium investment group’.”
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 20111, including Thai flood, Tohoku earthquake and tsunami, New Zealand earthquake and Australian floods, less than 22%2; of the total economic loss registered was insured3, 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% and 50%4 respectively. In 2010 China suffered its most devastating floods in a decade causing around US$50 billion economic loss, of which only US$1 billion was covered by insurance5– another example illustrating the low insurance penetration in Asia.
In view of the situation, beyond providing general reinsurance solutions, Peak Re also invests significantly in the research and development of risk management solutions tailored for demand by households and business in the region. 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,” said Mr. 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.”
“Peak Re enters the market at a time when Asia Pacific is the focus, and increasingly, driver of the global economy. In light of the strong underlying growth, increasing value concentration and rapid accumulation of wealth, we wish to help the Asia-Pacific community achieve a more reasonable level of financial protection against risks, notably the natural catastrophe exposure,” added Mr. Hahn. “To that end, we have started engaging in close dialogue with the private and public sectors, including national insurance industries, governments and supranational organisations. We also intend to grow Peak Re both organically and strategically via the acquisition of portfolios of profitable underwriting business.”
1 Total economic loss due to natural catastrophes around the globe in 2011 was approximately US$380bn, the largest on record and nearly two-thirds higher than the previous largest recorded in 2005. Of the total economic loss, around 77% was suffered by Asia Pacific. (Data source: Munich Re)
2 Data source: Munich Re. Since New Zealand had a high take-up rate for earthquakes, the overall ratio of insured loss to economic loss drops to around 17% when just Asia is considered (Data source: Munich Re)
3 Most of the risks will end up on reinsurers’ balance sheet, given the generally low frequency and high severity of natural catastrophes.
4 Data source: Swiss Re
5 Data source: Swiss Re
About Peak Re
Peak Re is headquartered in Hong Kong with an initial capital base of US$550 million. It is authorized by the Office of the Commissioner of Insurance of Hong Kong to launch its underwriting operations with a territorial scope encompassing Asia Pacific, and rated “A-” by A.M. Best, a leading international insurance industry credit rating agency.
The Company is led by a dynamic team of highly experienced reinsurance professionals with a diverse range of market experience. Founded on time-tested principles and united by a collective determination to embrace the rapid changes in the modern era, the management of the Company believes that Peak Re brings new solutions to the Asia-Pacific reinsurance industry.
About Fosun
Fosun was listed on the main board of the Hong Kong Stock Exchange on 16 July 2007.
As of today, Fosun has developed its development model with four growth engines, namely “insurance, industrial operations, investments and asset management”. Fosun is dedicated to developing itself as “a premium investment group with a focus on China’s growth momentum”. Currently, Fosun Group mainly invests in sectors that would benefit from the growth in domestic demand of China, such as consumption and consumption upgrade, financial services, resources & energy, and manufacturing upgrade, with a view to participating in the rapid development of China’s economy.
Over the past 20 years, Fosun Group has always been grateful for the support it received. While pursuing economic development, it also shares the fruitful results of development with its staff, partners and communities, taking the initiative to contribute the society in return. Meanwhile, Fosun also actively contributes its efforts to improve the business and natural environments of China so as to support the rejuvenation of Chinese economy and culture.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
