Fosun International Ltd., the Chinese conglomerate and investment company, has announced a much-improved contribution from its insurance and reinsurance businesses during the first-half of 2021.
Overall, the insurance and reinsurance operations at Fosun delivered RMB 15.48 billion (almost US $2.4bn) of revenues in the first-half of this year, achieving a year-on-year increase of 9.3%.
Fosun said the increase was mainly attributed to growth at the firm’s flagship reinsurance company Peak Re, as well as its Fosun Insurance Portugal operation.
Thanks to the growth of its re/insurance business, better underwriting returns and also positive investment performance, Fosun’s overall insurance and reinsurance segment profit rose significantly.
In fact, Fosun has reported a 172% year-on-year increase in re/insurance profits, reaching almost US $220 million for the half-year period.
Peak Re has been a significant driver of revenue and profit growth for Fosun in 2021 so far, as the Hong Kong headquartered global reinsurance underwriter reported a 22.3% rise in revenues to more than RMB 5 billion (around US $775m).
Even more impressively though, Peak Re’s investment total return more than doubled from 0.7% to 1.6%, which helped the reinsurance unit deliver its parent Fosun a near doubling of its profits for the first-half, which reached RMB 310 million (around US $48m).
Part of the driver of much improved results for Peak Re in the first-half of 2021 was an improvement in the underwriting margin, from 10.8% in H1 2020 to 13% in H1 2021.
Underwriting margins should be rising, thanks to higher reinsurance pricing, which has clearly helped Peak Re deliver the improved profits to Fosun.
Fosun said that Peak Re has benefited from portfolio adjustments and continued rate hardening, while a rebalancing of the reinsurance portfolio towards non-proportional business has also delivered greater price stability and growth in new business.
Impressively, Fosun reported that Peak Re has maintained a six-year track record of over 90% of claims settled within five days.
That track record will go a long way when it comes to business development, as ceding companies look for reliable, long-term, risk-taking partners.