Peak Re woos cedants with diversity of capital
Peak Re’s recent expansion into the European market by opening an office in Zurich will not mean it will ignore either its roots in Asia or opportunities in other parts of the world, Franz Hahn, chief executive of Peak Re, told SIRC Today.
The company opened a branch office in Zurich in September and as of June 2015, Peak Re wrote more than 25 percent of its premiums outside its core Asia-Pacific region.
But, Hahn said, opportunities in Asia-Pacific remain abundant, especially for a reinsurer like Peak Re with its unique Asian pedigree.
“Asia-Pacific will remain a growth region, albeit at a slower pace. Underinsurance remains a persistent phenomenon as insurance penetration in key markets such as China or India is still at about half of the global average,” he said.
“As this gap continues to narrow, Peak Re with its strong expertise and experience in Asia is well positioned to benefit from this momentum. We will continue to enlarge our position by expanding into further lines of business such as life, but also by growing our position in credit & surety and agriculture.
“Furthermore, we will grow our footprint in our core Asian markets such as China, and also in frontier markets such as Pakistan where Peak Re can contribute to advancing the still nascent insurance sector.
“We are also targeting growth elsewhere and we are open to the possibility of acquisitions where the right opportunities arise. Any potential target has to fit our criteria of diversification, size, profitability or cultural match,” he said.
Peak Re has already done some deals. In July, it acquired a 50 percent stake in NAGICO Holdings, a property/casualty insurer based in the Caribbean which, Hahn said, will provide Peak Re with attractive growth prospects in the region.
“NAGICO provides us with access to Caribbean nat cat exposure, a risk currently entirely uncorrelated with our Asia-Pacific nat cat exposure. In addition, growth in the Caribbean reduces our dependence on our Asia-Pacific growth markets,” he said.
“In addition NAGICO, as a Caribbean primary insurer, requires consistent reinsurance and asset management support, which Peak Re will be able to offer.
“The acquisition is very much in line with the strategy of our 14.9 percent shareholder, the IFC, which is committed to strengthening re/insurance markets in emerging and developing countries.”
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