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China & India drive premium growth at Peak Re in 2018

28th August 2018 - Author: Luke Gallin

Hong Kong domiciled reinsurer, Peak Reinsurance Company Limited (Peak Re), grew its gross written premiums by more than 42% in the first-half of the year to US$671.2 million, driven by the continued strengthening of its presence in the Asia-Pacific region.

Peak Re logoThe reinsurer has reported premium income of US$671.2 million for the first six months of 2018, compared with US$472.4 million for the same period last year, representing year-on-year growth of just over 42%.

According to its H1 2018 earnings release, Peak Re’s premium income growth is driven by the strengthening of its presence across the Asia-Pacific, particularly in both China and India, as well as the continued development of its international book across Europe and North America.

Peak Re’s Chief Financial Officer (CFO), Cathy Chen, commented: “I am proud to report that Peak Re delivered again strong results and have built up a profitable book of business over the years. For the first six months of 2018, we have reached a net profit of USD30.2 million and an annualised return on equity of 6%.

“The net assets reached USD1.02 billion, contributed by the joining of new investor Prudential Financial, Inc. in early 2018. Our solvency remains very strong with solvency adequacy ratio of 521.6%. Peak Re continues to deliver stable and sustainable returns and is committed to maximising long-term shareholder value.”

The US$30.2 million H1 net profit recorded by the firm is 16% lower than the US$36.1 million recorded a year earlier, which it appears is a result of a lower investment return, year-on-year. The reinsurer’s total investment return fell from 3.4% in the first-half of 2017 to 1.5% this year, while investible assets grew from roughly US$1.4 billion in 2017, to roughly US$1.6 billion this year.

The reinsurer did record an improved, albeit slight, underwriting performance in the opening six months of 2018, with its technical combined ratio improving to 96.3%, compared with 97.6% a year earlier.

At the same time, Peak Re’s annualised return on equity reached 6% in H1 2018, compared with 7.9% a year earlier.

The Hong Kong-based reinsurance company says that its continued path of profitable growth in the first-half of 2018, was achieved by growth in premiums alongside disciplined underwriting and its attention to administrative expenses. Underlined by the fact the reinsurer grew its book during H1 while improving its underwriting performance despite a slight dip in net profit, and the fact its administrative expense ratio hit 3.2% in H1 2018, compared with 4% for the same period last year.

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