AM Best confirms Peak Re’s Financial Strength Rating of A–, revising the company’s outlook to negative

Hong Kong, 15 October 2022 – Peak Reinsurance Company Limited (“Peak Re” or the “Company”), a Hong Kong-based global reinsurer, announced today that AM Best has affirmed the Financial Strength Rating of A– (Excellent) and the Long-Term Issuer Credit Rating of a– (Excellent) of Peak Reinsurance Company Limited in Hong Kong and its subsidiary in Switzerland. In addition, AM Best revised the Company’s outlook from stable to negative.

Peak Re’s strong stand-alone profile affirmed

As indicated by AM Best’s confirmation of Peak Re’s A– rating, Peak Re’s financial strength remains solid with a capitalisation of USD 1.3 billion (as of 30 June 2022). Nonetheless, AM Best expressed a concern that macroeconomic headwinds and capital market conditions may exert financial pressure on Peak Re’s major shareholder, Fosun International Limited (“Fosun”), over the short to intermediate term. While the rating agency emphasised Peak Re’s robust level of risk-adjusted and ring-fenced capitalisation, AM Best noted that if a potential credit event were to occur at Fosun, Peak Re may be subject to contagion risk. AM Best’s rating affirmation comes after Moody’s Investor Services placed Peak Re’s Baa1 insurance financial strength rating on review for downgrade on 7 October 2022, following its placing of Fosun on review for downgrade, also citing contagion risk as the main risk.

Franz Josef Hahn, CEO of Peak Re, states: “As AM Best affirms, Peak Re is equipped with an excellent stand-alone credit profile. Looking back at our over nine years track record of continuous and profitable growth, Peak Re is now a resilient and agile reinsurer with a strong footprint and business franchise in our core markets in Asia-Pacific and beyond. We enter the upcoming renewal season fully committed to meet the expected increased demand from our cedants for technical expertise and reinsurance capacity. At the same time, we are working closely together with our shareholders to address and resolve the rating agencies’ concerns.”

Peak Re has strong ring-fencing measures in place to protect its capital

Since 2012, Peak Re has implemented effective ring-fencing measures, which it strengthened over time. The company is governed by board of directors with currently more than one-third of independent non-executive directors under strong regulatory oversight from the Hong Kong Insurance Authority. As attested by both rating agencies, Peak Re’s capital is adequately protected from access by shareholders or other third parties through extensive risk management and governance measures.