Peak Re sees H1 2021 GWP dip as profits rise
August 25 2021 by InsuranceAsia News
Correction: This story was amended on August 26 to correct an error regarding the percentage dip in gross written premium for H1 2021. The correct figure is 9.6% as opposed to the 13.1% originally published.
Peak Re saw its gross written premium (GWP) dip by 9.6% in the first half of the financial year until the end of June (H1 2021) even as the Hong Kong-based reinsurer’s profitability showed some improvement, according to an August 24 statement from Fosun International.
Fosun, which owns 86.51% of Peak Re, said in an earnings announcement that the profits attributable to the Shanghai-headquartered conglomerate from Peak Re climbed to Rmb310 million (US$47.9 million) in H1 2021 as opposed to Rmb170 million in H1 2020.
The statement said the reinsurer’s underwriting margin had improved to 13% — an increase from the 10.8% seen in H1 2020 — amid “portfolio adjustments” and “continued rate hardening in major markets”.
In addition, efforts to rebalance the firm’s portfolio towards non-proportional reinsurance have helped to ensure price stability alongside further business development, the statement added.
The reinsurer’s GWP was US$773.7 million in H1 2021 — down from US$855.9 million in H1 2020 — while its net earned premium climbed 22% to US$778.2 million compared with US$637.4 million for the same time period last year.
These results was supported by improving macro-economic fundamentals and by the end of H1 2021, Peak Re had witnessed a non-annualised investment return of 1.6% with investable assets and net assets of US$2.8 billion and US$1.5 billion, respectively.
In June 2021, Peak Re agreed to acquire the remaining 50% stake of Caribbean insurance group Nagico to take full ownership of the firm. The transaction, which is subject to regulatory approvals, aligns with Peak Re’s stated strategy to diversify its portfolio globally.
In February this year, Peak Re completed its third reinsurance sidecar transaction via its Bermuda-domiciled special purpose insurer Lion Rock Re to raise US$107 million. Peak Re ranks 29th among global reinsurance groups by S&P Global Ratings in terms of net reinsurance written premium.
The firm sits within Fosun’s wider insurance portfolio which includes Fosun International Portugal and China’s Pramerica Fosun Life Insurance. This division bounced back to profitability in the first half of this year with earnings of Rmb1.967 billion compared with a loss of Rmb1.415 billion in H1 2020. Revenue in this division was up 9.3% to Rmb15.475 billion.
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