China is a big part of Peak Reinsurance’s current portfolio and will continue to be so, while the increasing opportunities in India have only just started to be addressed, according to the company’s Managing Director of Global Markets, Chris Kershaw.
In a recent interview with Reinsurance News Kershaw laid out his thoughts on the current growth trajectory of Peak Re, the opportunities that remain throughout Asia and the innovation that may be needed to fully realise them.
“Asia-Pacific will remain our core and we believe there is strong underlying growth there,” said Kershaw.
“We firmly believe the opportunity is there on the property and casualty (P&C) as well as on life and health (L&H) side, in building a relevant and viable business that serves clients well.”
“Our business model is not built on underwriting the market,” he continued, “it is very much built around working closely with a selective number of clients to build sustainable returns for both sides, over time.”
Indeed, Peak Re’s Asia-Pacific focus has played a significant role in its recent premium income growth. The reinsurer reported premium income of $671.2 million for the first six months of 2018, compared with $472.4 million for the same period last year, representing year-on-year growth of just over 42%.
Asked whether, moving forward, adaptation and innovation would be required to successfully navigate the emerging markets throughout Asia, Kershaw stated that bringing fresh thinking to new problems will be important in modernising the business.
“This is something that we’ve felt very strongly that we’ve wanted to do since day one,” Kershaw added.
“We know that, given the way the life reinsurance business has worked, the industry may not have the immediate answer. But, we are certainly open to looking at different ways of doing things.”
“It’s always been part of our mandate and our role, to bring this process forward. We are not a market leader, but step-by-step we’ve actually influenced some thinking, and that’s the ambition.”
Commenting on whether not he sees growth on the life side coming from outside Japan – a country that boasts strong pricing power and the use of standard mortality rates, allowing particularly high margins on protection-type products – Kershaw said, “Very much so. And I think it’s very important to think about life and health together.”
“We may find there is more of an opportunity for us on the health side at this stage, simply due to the way life reinsurance has been transacted traditionally.”
“We restarted our L&H business about two years ago, we are continuing to build that out,” he added. “There is unquestionably an opportunity when you have 3 billion people on your doorstep, and I think it will be foolish to put that one side away and say, we are not going to look at that. I think it clearly is an opportunity.”