AM Best has affirmed its financial strength and credit ratings for Hong Kong-based reinsurer Peak Reinsurance Company Limited (Peak Re), citing robust capitalisation, improved investment risk, and strong liquidity.
The rating agency upheld its financial strength rating of A- (Excellent) and its long-term issuer credit rating of ‘a-‘ for both Peak Re and its Zurich-based subsidiary, Peak Reinsurance AG. The outlook for both ratings is stable.
Analysts explained that the ratings reflect Peak Re’s balance sheet strength, as well as its operating performance, business profile, and enterprise risk management.
AM Best also emphasised the reinsurer’s risk-adjusted capitalisation, a strengthening trend in its capital and surplus, its controlled level of net underwriting leverage and an improvement in its overall investment risk profile, as well as its strong liquidity.
In addition, AM Best recognised that Peak Re has consistently reported favourable operating results over the past five years.
The company continues to achieve these results with efficiency, analysts added, reflected in its stable and lower-than-average management expense ration.
Investment results have similarly been favourable over the past five years, supported by a growing stream of interest and dividend income from debt and listed equity investments.
Finally, AM Best noted that Peak Re continues to diversify its business portfolio, which is primarily focused on non-life business, but has increasingly been expand into life and health, particularly in the area of medical reimbursement.