Peak Re sees casualty diversification as key to wider expansion

Peak Re’s Edward Shen and Natalia Kolibabchuk outline where casualty can support the reinsurer’s new growth strategy, from international cyber and European motor to specialist partnerships.

Key points:
Casualty set to play role in Peak Re’s growth strategy
Expansion will vary by market
European motor adds diversification

Peak Re is entering a new phase of expansion, having set out its five-year growth strategy to broaden its capabilities and geographical reach.

Casualty is expected to be a key part of that ambition. Peak Re sees opportunities to rebalance exposures and build selectively where diversification, technical expertise and risk-adjusted returns support expansion.

Baden-Baden Today spoke with Edward Shen, head of casualty product underwriting at Peak Re, about opportunities spanning international cyber, selected European motor and specialist distribution partnerships.

“Casualty can make a meaningful contribution to Peak Re’s growth ambitions, particularly through international casualty,” Shen said. “But our objective is not simply to expand traditional treaty business.”

“The aim is profitable and sustainable growth. If the risk-adjusted returns are attractive, we will grow. If the cycle is not favourable, we will reduce or stop in those segments.”

Local calculus

International casualty, Shen said, cannot be characterised simply as either hard or soft.

Capacity is pushing rates down in some well-performing areas, while reinsurers remain cautious around difficult portfolios and long-tail exposures, where reliable claims information and adequate pricing remain critical.

“We are seeing some softening in well-performing areas where capacity is readily available and claims experience has been favourable,” he said. “But that is not uniform across casualty classes or territories.”

Liability risk is also inherently local. Claims develop within different legal, regulatory and social environments, meaning similar portfolios can perform differently across countries.

“Casualty is not as straightforward as property. It is inherently local,” Shen said.

“Casualty will make a meaningful contribution to Peak Re’s growth ambitions.”

Cyber rebalance

Cyber is one area where that rebalancing could become visible. “International cyber is a strategic opportunity for Peak Re,” Shen said. “We may consider reducing US cyber while increasing international cyber, particularly as insurance penetration develops in Europe and Asia. It also brings diversification to our portfolio.”

Low penetration alone is not enough to justify deploying capacity. Cyber losses can spread across multiple insureds through common technology providers, cloud platforms or software vulnerabilities, making accumulation management and exposure data critical.

“Low penetration does not automatically make every cyber opportunity attractive,” Shen said. “Sustainable growth requires disciplined risk selection, suitable wordings and credible exposure data.”

Terms and conditions will matter alongside price. Shen said competitive pressures may have discouraged some cyber underwriters from introducing explicit AI exclusions, leaving AI-related risks not explicitly addressed in some policies even as AI could potentially increase the speed and sophistication of malicious attacks.

Broader channels

European motor offers another avenue for growth, with Peak Re planning to add selected clients, including in Central and Eastern Europe.

Natalia Kolibabchuk, who leads European motor underwriting at Peak Re, said the portfolio provides important diversification for the European book. “Alongside traditional structures, our structured solutions team can offer prospective and retrospective tailored solutions to meet clients’ needs,” she said.

“We see various opportunities across European countries and define our appetite on an individual client basis”, emphasizes Natalia Kolibabchuk. “Some cedents may have a strong view on the minimum security rating they require, while others are looking for long-term partnerships across various programmes. 

“Looking at motor third-party liability (MTPL), although the situation differs according to market, we clearly see that original prices are under pressure and rate increases are below the inflation in spare parts and labour costs. In this environment, we take a pragmatic approach and focus on partners with good portfolio management, underwriting expertise, strong claims handling, sustainable reserving and risk-adequate pricing.”

Peak Re is also assessing opportunities in selected Asia-Pacific markets where economic development and rising insurance penetration can support demand. Shen said the focus would be on markets where technical expertise and local relationships allow it to add value.

The reinsurer is also considering affinity programmes and specialist MGA partnerships where they provide access to specialised risks or customer segments it cannot reach directly.

“These partnerships can provide access to specialised risks and customer segments, provided there is good alignment on underwriting standards, data transparency and portfolio management,” Shen said.

Edward Shen is head of casualty product underwriting at Peak Re. He can be contacted at edward.shen@peak-re.com

For more news from Baden-Baden Today, click here.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.