Hong Kong-based global reinsurer Peak Re has recorded a net loss of US $79.8 million for 2022, while also growing its gross written premiums from $2.14 billion to $2.29 billion.
The results were disclosed as part of the annual report of Peak Re’s main shareholder, Fosun, which cited rising catastrophe losses as among the main factors in the reinsurer’s performance, including from Hurricane Ian.
Fosun also noted that the sharp rise in global interest rates throughout the year inevitably resulted in unrealized losses for the company’s fixed-income portfolio.
However, it’s also expected that higher interest rates will benefit investment yields for Peak Re going forward.
The high level of large catastrophe losses last year, in combination with an increase in the frequency and severity of secondary peril losses, resulted in greater natural disaster claims last year, but also greater demand for reinsurance covers, the report from Fosun noted.
But at the same time, these losses “kept a lid on the supply of available reinsurance capacity,” it notes, with this trend further exacerbated by tightening monetary conditions over the last year.
“Stringent risk management and prudent investment has helped Peak Reinsurance to weather the volatile financial market during the Reporting Period in a relatively good shape,” Fosun concluded.
At the end of the 2022 reporting period, Peak Reinsurance recorded investable and net assets at $2.95 billion and $1.2 billion, respectively.
It also remained A- rated by AM Best, taking into account its balance sheet strength, diversified product portfolio and geographic mix, and solid capitalization relative to risk underwritten.
Fosun International, a Chinese multinational conglomerate holding company, was reportedly looking at a potential sale of its 86.9% share in Peak Re late last year following a credit rating downgrading by Moody’s on Fosun, as it continues to struggle with high debts.