Peak Re 2016 premium up 20% YoY at barely changed combined ratio

Hong Kong-based Peak Reinsurance Company’s premium income increased by 20 percent year-on-year in 2016 with a barely changed combined ratio but net profit was hit by lower investment returns.

Peak Re’s gross premiums written reached $698 million in 2016, up from $583 million in the previous year. The combined ratio came in at 97.6 percent compared to 96.8 percent a year earlier. Technical underwriting profit (before administrative expenses) grew by 22 percent from $31 million to $38 million over the period.

The company's reinsurance portfolio is focused on Asia Pacific, with 65 percent from Asia Pacific and 35 percent from the rest of the world. Peak Re’sperformance continued to benefit from a competitive administrative expense ratio of 4.7 percent, a slight improvement compared with the previous year, according to the press release.

“For Peak Re, 2016 was another year of strong and steady growth. Since inception, our technical results have been consistently profitable,” said CEO Franz Hahn. “We successfully weathered the unabated softening of global and regional reinsurance market conditions,” he added.

However, net profit fell in 2016 to $6.9 million from $59.2 million in the previous year as a result of a lower investment return.

Peak Re suffered some impairment losses on equity positions in 2016; total investment return was 1.5 percent in 2016 and net investment return stood at 3.0 percent.

Nevertheless, Peak Re’s outlook remains confident. The year-end renewals have confirmed the company’s continued ability to grow profitably on the back of higher shares and new business with existing clients in particular, according to the press release.

Peak Re’s new European subsidiary will go a long way in broadening the company’s footprint in this part of the world, the statement said. At the end of 2016, Peak Re has created a unit in Zurich to benefit from Solvency II equivalence and told Intelligent Insurer that it sees growth potential in proportional reinsurance business in Europe.

The Solvency II equivalency of Switzerland is a key asset for Peak Re, the company noted. At the same time, Peak Re will continue to diversify into the Americas and selectively capture opportunities in the Middle East and Africa.

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