Hong Kong headquartered reinsurer, Peak Reinsurance Company Limited (Peak Re), has underlined the significance of gaining Solvency II equivalency via the establishment of its reinsurance subsidiary in Zurich, Switzerland.
“Peak Re’s new European subsidiary will go a long way in broadening its footprint in this part of the world. The Solvency II equivalency of Switzerland is a key asset for Peak Re. At the same time, the Company will continue to diversify into the Americas and selectively capture opportunities in the Middle East and Africa,” said the reinsurer in its 2016 earnings release.
The reinsurer announced at the end of last year that it had received approval to establish a subsidiary in the region by the Swiss Financial Market Supervisory Authority (FINMA), revealing that Peak Re AG will be the company’s main underwriting hub in continental Europe.
The reinsurer views Europe as a key market and the new subsidiary enables the firm to expand its services across the world and access continental European markets. The new unit begins operations with a 200% solvency ratio, and has been capitalised based on the Swiss Solvency Test.
In light of its new European reinsurance subsidiary and solid financial results in 2016, despite challenging market conditions, Peak Re’s outlook for 2017 remains “confident.”
“The year-end renewals have confirmed the Company’s continued ability to grow profitability on the back of higher shares and new business with existing clients in particular,” said Peak Re.
In 2016 the reinsurer recorded premium income growth of 20% to $698 million, and reported a technical underwriting profit of $38 million, compared with $31 million a year earlier. Lower investment returns did see the firm record net income of just $7 million in 2016, and its combined ratio weakened slightly to 97.6%, compared with 96.8% a year earlier.
“For Peak Re, 2016 was another year of strong and steady growth. Since inception, our technical results have been consistently profitable,” said Peak Re’s Chief Executive Officer (CEO), Franz Hahn.