Peak Re is one of the few reinsurers of Asian origin present in the MENA region. We started to underwrite our first business in 2015. Ever since then we have steadily expanded our footprint in the region. Today we have customers in markets such as the GCC, Jordon and North Africa. In addition, we travel to the region regularly to expand our client relationships.
We position ourselves as a traditional reinsurer based on modern foundations. Peak Re puts the traditional values of a reinsurer first: we are a reliable, responsive, loyal and long-term partner for our cedants and we pursue this approach on the foundations of our state-of-the-art systems and processes – in terms of modelling capabilities, risk management or governance structures – which allow us to establish a cost and capital efficient global franchise in a period that has seen no rate increases ever since we received our license in late 2012.
Our approach applies to all our clients – whether they are based in Asia Pacific, the MENA region or other markets. However, our positioning resonates particularly well with our cedants here, who first and foremost understand insurance as a people-business, build on trust earned over time. It has therefore been very helpful that our underwriters have been known in the region for quite some years before even joining Peak Re.
In line with our overall underwriting policy, we carefully select our clients, and invest our time and build an in-depth familiarity with their book of business. Our intention is to grow along with our clients over time and support them with our experience and knowledge in various specialty lines to create value sustainably in the long run.
Our origination in Asia-Pacific comes as an advantage as we build our foothold in the MENA region. Much of the market trends that we experience here, resemble the developments that we see or have already experienced in Emerging Asia. On the upside there is the speed of growth as both regions will continue to invest heavily into building their infrastructure and economic transformation, which will bring significant opportunities for the (re) insurance market. For the period from 2015 to 2020, most of Emerging Asia will register an annual premium growth in the double-digits, and this will be the expected range for markets like the UAE and – to a slightly slower degree – also Saudi Arabia (according to an Emerging Market study by EY, 2016). Growth in both regions, given their low insurance penetration, is expected to increase as urbanisation and the emergence of a more affluent middle class progresses.
Furthermore, as already evident in China and other Asian markets and also approaching in some MENA markets, technological transformation and digitisation will change the foundations of insurance, the way how its products are designed and sold – providing access to new consumers segments and possibly also habits.
Thirdly, tighter and more stringent regulation is creating the hotbed for insurance growth. While in parts of Emerging Asia we are experiencing these changes already, in the Middle East, we are witnessing its effects currently in Saudi Arabia and also in the UAE, where compulsory insurance schemes are creating growth in personal lines. The tighter regulation also contributes to improve rates for the benefit of the markets. However much remains to be done in Asia and the MENA to enhance the consistency of regulation and also assure its enactment.
On a downside, there is also the dependency of economies in both regions on commodity prices, namely revenues generated through oil sales, their exposure to currency depreciations and the need to diversify the economies away from a dependence on a single or correlated revenue streams.
