Peak Re seeks international growth
Hong Kong-based Peak Re is seeking international expansion despite plummeting profit in 2016.
In 2016, Peak Re created a unit in Zurich to benefit from Solvency II equivalence and hoping to grow in proportional reinsurance business in Europe.
“Our new European subsidiary will go a long way in broadening our footprint in this part of the world,” chairman Wang Qunbin and CEO Franz Josef Hahn said in a joint statement in the 2016 annual report.
“The Solvency II equivalency of Switzerland is a key asset for Peak Re. At the same time, we will continue to diversify into the Americas and selectively capture opportunities in the Middle East and Africa.”
“Cost efficiency will gain in importance as a competitive advantage as global reinsurance markets continue to soften.”
For 2016, Peak Re’s profit dropped to $6.9 million from $53.8 million in 2015.
Peak Re suffered some impairment losses on equity positions in 2016, adversely affecting the income statement, Hahn and Qunbin commented.
“We continue to deliberately tolerate volatility on the asset side while carefully avoiding it on the liabilities side of the balance sheet.”
Peak Re’s total investment return declined from 5.7 percent in 2015 to 1.5 percent in 2016.
Over the period, gross written premium grew to $698.2 million from $582.6 million, while net claims increased to $377.4 million from $344.8 million. Nevertheless, the technical combined ratio came in at an almost unchanged 92.9 percent.
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