News


lthough market conditions in Europe remain competitive and rates in many


lines are soft, Hong Kong-based Peak Re has found cedants in Europe receptive to working with an Asian reinsurer because of the diversity it offers on their panels and its innovative approach. That is what Franz Hahn, chief executive


of Peak Re, told Baden-Baden Today, speaking in relation to its European expansion strategy. The company recently opened a branch office in Zurich and last month appointed Jacques Burri, a former reinsurance manager with Zurich Insurance. He joined Railovy Boyer, its director of underwriting for Europe, who joined from PartnerRe in July. Hahn said that as of June 2015, Peak Re


wrote more than 25 percent of its premiums outside its core Asia-Pacific region. Europe is already its biggest non-Asian market with a share of about 18 percent of Peak Re’s global gross written premiums. While Asia will remain its core region, it is seeking a broader diversification, he said. Its presence in Europe was boosted in


January 2014 when Fosun, the biggest investor in Peak Re, acquired Fidelidade, one of the biggest insurers in Portugal, providing Peak Re with additional reinsurance opportunities. This year, the bulk of the business it has


added has been written with existing clients who allocated larger shares to the company. “Our expansion in Europe reflects our


19.10.15 MONDAY


Peak Re’s diversity woos European cedants A


for cedants in search of tailored, innovative solutions and swift service.” The company’s move into Europe does not mean it is ignoring either its roots or opportunities in other parts


however. Hahn says that opportunities in Asia- Pacific remain abundant. “Asia-Pacific will remain a growth region,


albeit at a slower pace. Underinsurance remains a persistent phenomenon as insurance penetration in key markets such as China or India is still at about half of the global average,” he said. “As this gap continues to narrow, Peak


Franz Hahn


cedants’ rising recognition and appreciation of Peak Re as a long-term oriented provider of multi-line solutions,” Hahn said. While he admits market conditions are


challenging, he also identifies specific reasons that cedants like working with Peak Re, and stresses that price is only one factor in negotiations. “The market is highly competitive and rates


are soft. However, price cannot be the guiding principle to determine the right moment for market entry,” he said. “Peak Re’s independent origin of capital instantly diversifies our cedants’ panels. “Also, our distinct emerging markets expertise makes Peak Re an attractive partner


Re with its strong expertise and experience in Asia is well positioned to benefit from this momentum. We will continue to enlarge our position by expanding into further lines of business such as life, but also by growing our position in credit & surety and agriculture. “We are also targeting growth elsewhere and


we are open to the possibility of acquisitions where the right opportunities arise,” he said. Peak Re has already done some deals. In


July, it acquired a 50 percent stake in NAGICO Holdings, a property/casualty insurer based in the Caribbean which, Hahn said, will provide Peak Re with attractive growth prospects in the region. “NAGICO provides us with access to


Caribbean nat cat exposure, a risk currently entirely uncorrelated with our Asia-Pacific nat cat exposure. In addition, growth in the Caribbean reduces our dependence on our Asia-Pacific growth markets,” he said. n


a more benign catastrophe experience in 2014, although the low interest rate environment overshadows the sector, AM Best has said in a special report on the sector released on October 15. The rating agency said that demographic


German insurers tipped to prosper despite challenges G


erman insurers continue to benefit from a strong domestic economy and a return to


expansion across all the insurance sectors—life, non-life and health. Higher insurance premium rates have been


a partial factor in the rise in GWP, combined with an uplift in gross domestic product (GDP) and a fall in unemployment, the report said. Challenges remain, however. In particular,


factors coupled with the country’s strong economic fundamentals are likely to result in ongoing demand for insurance in the long term. In 2014, insurance penetration was stable at 6.6 percent and there was a near 3 percent increase in total gross written premium (GWP) for a second successive year, driven by


the difficult environment for generating investment returns is placing significant pressure on German life insurance companies, the report said. In 2014, the German property/casualty


(P/C) sector achieved better underwriting results compared with 2013, driving improved overall earnings for the insurance market. This


4 | BADEN-BADEN TODAY | DAY 1: Monday October 19 2015 of the world,


was primarily a result of reduced losses for natural catastrophes during the year, with hail and windstorm Ela the largest major loss in 2014 causing an estimated €400 million ($456 million) of claims for property and €250 million ($285 million) for motor. Overall, AM Best said, German insurers


have been resilient and in the past few years have absorbed the continued effects of a low yield environment. It noted that should the benign loss environment continue, the German P/C sector is expected to enjoy another good year in 2015, with hard market characteristics being seen in many core lines, particularly property and motor. n


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