AM Best Affirms Credit Ratings of Peak Reinsurance Company Limited and Its Subsidiaries

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Peak Reinsurance Company Limited (Peak Re) (Hong Kong) and its subsidiaries, Peak Reinsurance AG (Switzerland) and Peak Reinsurance North America Ltd. (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Peak Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in the neutral impact from Peak Re’s parent company, Fosun International Limited (Fosun).

Peak Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level at year-end 2025. The company’s reported capital and surplus grew by 17% to USD 1,678 million, supported by retention of underwriting and investment profits, while Peak Re made its first dividend payment during the year. The growth in its capital base was also contributed to by the upsized issuance of perpetual subordinated guaranteed capital securities of USD 350 million in 2025, upon redemption of the prior instrument, indicating the company’s good level of financial flexibility in accessing traditional and alternative capital markets. Peak Re maintained a low adjusted financial leverage at 12.5% (including equity credit for the above-mentioned hybrid capital securities) and strong interest coverage, based on AM Best’s calculations.

Other supportive factors of the balance sheet strength include the overall prudent investment risk profile, comprehensive retrocession programme and strong liquidity.

Peak Re achieved return on capital and surplus (including movement in other comprehensive income) of 12.3% in 2025, and stayed profitable during the first half of 2026. The overall reinsurance service revenue reported strong growth in 2025, while the non-life underwriting portfolio has become more balanced in terms of business and geographic exposures, reducing concentration risk and earnings volatility. Notwithstanding, there was an uptick in the IFRS 17 non-life combined ratio, mainly reflecting loss experience fluctuations in the short-term health business. The life reinsurance business has achieved solid growth over the last few years and continues to offer diversification benefits in business and capital efficiencies. A stable stream of interest income from debt instruments, combined with dividends from listed equities and distributions from fund investments, continues to form the backbone of Peak Re’s investment returns. High-quality fixed income remains the core allocation, with controlled but diversified exposure on equities and real estate funds. The company continues to maintain a lean and efficient operational model.

Peak Re’s non-life portfolio is diversified by product lines and regions with a focus on the Asia-Pacific region. Leveraging its underwriting expertise, the company pursues growth through targeted expansion amid the current rate cycle, with casualty being its largest business line and key growth driver. Peak Re continues to expand its traditional risk business in the life segment, with a focus on health products including medical and critical illnesses in China. Moreover, the company has been growing its market presence offering structured reinsurance solutions to clients for capital efficiency purposes.

Peak Re has demonstrated a track record of effective mitigation of potential contagion risk stemming from Fosun’s weaker credit fundamentals and can maintain its own financial strength. The ring-fencing mechanism is underpinned by the board composition, as well as stringent related-party transaction policies and regulatory oversight. Peak Re’s robust corporate governance framework was reinforced following the change of minority shareholders early in 2026, which broadened the overall board composition and voting rights. On a standalone basis, AM Best expects Peak Re to maintain a robust level of balance sheet strength assessment, while continuing to adopt disciplined underwriting and prudent investment strategies to strengthen its operating performance over the short to intermediate term.

Positive rating actions may occur if Peak Re continues to demonstrate sustained and robust balance sheet strength fundamentals with supportive operating profitability from business strategy execution, while being exposed to a low level of negative parental contagion risk. Negative rating actions may occur if Fosun were to exhibit financial distress or suffer from reputational risk, to the extent that it may impair the current effective ring-fencing mechanism, thereby giving rise to heightened contagion risk to Peak Re. Negative rating actions also may arise if there is an adverse and deteriorating trend in Peak Re’s operating results or if there is a material deterioration in its balance sheet strength assessments.

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

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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