A.M. Best Affirms Ratings of Peak Reinsurance Company Limited

HONG KONG--()--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Peak Reinsurance Company Limited (Peak Re) (Hong Kong). The outlook for both ratings is stable.

The ratings of Peak Re reflect its supportive risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the experience of its senior management in the reinsurance industry. The ratings also recognize the company’s improved diversification by region and lines of business, development of in-house risk management functions, as well as the improving trend in the management expense ratio.

Partially offsetting rating factors include the potential volatility in Peak Re’s investment results, the competitive global reinsurance market in which the company operates and a weaker underwriting result than projected in its initial business plan when the ratings were first assigned in 2012. As the company strategically sets a high proportion of investments in higher risk assets, volatility in asset values or negative market sentiment could adversely impact operating performance. Also, strong premium growth anticipated over the next three years will lead to an increase in the underwriting leverage ratio and place pressure on risk-adjusted capitalization.

Positive rating movement could occur if the company can demonstrate strong risk-adjusted capitalization and a stable track record of underwriting and investment profitability over a period of years. Negative rating actions may occur if the company’s risk-adjusted capitalization, liquidity position or level of financial flexibility declines to a level below A.M. Best’s expectations or a deteriorating trend in underwriting or investment results emerges.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Ken Chow, +852-2827-3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +65-6859-8412
Managing Director, Analytics
moungmo.lee@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Ken Chow, +852-2827-3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +65-6859-8412
Managing Director, Analytics
moungmo.lee@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com