Peak Re launches first Asian reinsurance sidecar transaction

  • Lion Rock Re secures US$75 million from high-quality global investors

  • Represents important milestone in Hong Kong and Asian (re)insurance market

Peak Reinsurance Company Limited (“Peak Re”), a global reinsurer based in Hong Kong, today announced that it has launched Asia’s first sidecar transaction via a new Bermuda-domiciled special purpose insurer, Lion Rock Re Ltd., to provide collateralised retrocession for part of Peak Re’s global property reinsurance risk portfolio.

The establishment of this special financial structure, commonly known as a “reinsurance sidecar”, allows investors to take on the risk and benefit from specific books of an insurance or reinsurance company.

As part of the deal, Lion Rock Re has entered into an exclusive quota share agreement with Peak Re to reinsure part of Peak Re’s global property reinsurance risk portfolio.

Lion Rock Re has successfully secured commitments of US$75 million from a panel of third-party investors globally. The transaction is expected to close in mid-December 2018.

“Peak Re is pleased to be a pioneer in launching Asia’s first sidecar transaction in the reinsurance industry. It marks an important milestone in the reinsurance market of Hong Kong as well as Asia,” said Franz Josef Hahn, Chief Executive Officer of Peak Re. “The transaction is supported by a range of high-quality global investors who see the investment as a one-of-a-kind opportunity to invest alongside Peak Re and gain exposure to a unique geographically diverse property portfolio.”

“Peak Re was established in 2012 to support the needs of communities and emerging middle class societies by meeting reinsurance needs covering life, health and non-life risks, in Asia and around the globe. We are very pleased with the positive reception from the ILS (Insurance-Linked Securities) investors that recognised our strong track record. We look forward to continuing to broaden our partnerships with the capital markets in the future,” said Lawrence Cheng, Managing Director, Underwriting at Peak Re.

Aon Securities Inc., is the structuring and placement agent of the transaction.

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Note to editor: A reinsurance sidecar is a financial structure established to allow investors to take on the risk and benefit from the return of specific books of insurance or reinsurance business.
It plays an important role in narrowing the protection gap in society while providing investors access to new regions, perils and opportunities.

About Peak Re
Peak Re is headquartered in Hong Kong with shareholder equity of US$1.02 billion as of 30 June 2018. It is authorised by the Insurance Authority of Hong Kong and is rated “A-” by A.M. Best, a leading international insurance industry credit rating agency. Fosun International Limited (00656.HK) and Prudential Financial, Inc. hold 86.9% and 13.1% of Peak Re via Peak Reinsurance Holdings Limited, respectively. Peak Re offers reinsurance 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.

 

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