KUALA LUMPUR, Oct 20 (Bernama) -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Hong Kong’s Peak Reinsurance Company Limited (Peak Re) and its subsidiary, Peak Reinsurance AG, Switzerland.
The outlook of these credit ratings (ratings) is negative, which reflected Peak Re’s balance sheet strength, which AM Best assessed as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
In addition, the ratings factor in a neutral impact from the company’s ultimate parent, Fosun International Holdings Ltd (Fosun).
Despite the company’s capital and surplus having declined by 18.5 per cent to US$1.2 billion as of year-end 2022, the rating agency expects Peak Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, to remain at the strongest level over the short to intermediate term. (US$1=RM4.77)
In a statement, AM Best said Peak Re reported its first net loss in 2022 since establishment, as the combined result of underwriting performance dragged by catastrophe losses, unfavourable investment returns and foreign exchange losses.
AM Best views Peak Re’s retrocession programme to be effective in mitigating negative impacts from event losses to a manageable level.
In recent renewals, the company has put stronger focus on risk selection with an aim to lower catastrophe exposure and improve the expected technical margins of its non-life portfolio across different product lines and geographies.
While the investments result was impacted negatively in 2022 amid the volatile market conditions, Peak Re has continued to de-risk its investment portfolio gradually and benefit from consistent interest and dividend income.
Peak Re’s non-life portfolio is diversified by product lines and geography, with a focus on the Asia Pacific region, and aims to expand its United States casualty business selectively and continue growing its non-proportional treaty business.
-- BERNAMA
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