Hong Kong-based reinsurer Peak Re has reported a year-on-year rise in net profit in 2020 to US $90.8 million, on the back of 18.1% growth in gross written premiums.
Profit was significantly up from the $35 million that Peak Re reported in 2019, while premium income rose to $1.966 billion, up from $1.665 billion previously.
The positive performance was one of the main drivers behind a 52.7% increase in the profit of the insurance segment of Peak Re’s parent company, Fosun, which came to RMB 1.158 billion ($177 million).
Fosun noted that Peak Re was able to achieve impressive premium growth and business expansion last year “despite a difficult period for the reinsurance industry and the global economy due to COVID-19.”
The reinsurer also improved its underwriting margin to 11.2% in 2020, versus 7.8% in 2019, due to further portfolio adjustments and rates hardening in major markets.
Additionally, its strong focus on noncommoditized business has helped to ensure price stability alongside further business development.
By the end of 2020, Peak Re achieved total investment return of 3.6% with year-end investable assets and net assets at $2.6 billion and $1.5 billion, respectively.
Given Peak Re is not a specialty underwriter and most of the businesses it covers have a broad exclusion of pandemics, the company does not anticipate significant losses due to COVID-19, and said that the impact on its financial performance in 2020 had been only “mild.”
“In 2020, the world mired in the COVID-19 pandemic became a hotbed of dissenting voices against globalization,” said Guo Guangchang, Chairman and co-Founder of Peak Re’s owner, Fosun. “However, Fosun kept forging ahead with globalization as we firmly believe the international business environment has become so open and globalized today that global cooperation and the sharing of technology have become inexorable trends.”
“2020 was a very difficult year, but from another perspective, it is also the best one for Fosun. The pandemic has given us a wonderful opportunity for introspection and refining Fosun’s strategies,” Guangchang continued.
“Having faced the once-in-a-century global crisis, we firmly believe we not only can calmly cope with problems that may arise but also can turn adversities into opportunities by evolving our strategy continually, stepping up our technology innovation and the reform of our organization.”