Peak Re reports best-ever net profit of $200m in 2023 despite market challenges

Hong Kong-domiciled global reinsurer Peak Re has achieved its best-ever net profit of $200 million for the full year 2023, supported by a diversified underwriting portfolio, as well as liquid and quality investment assets, despite a host of market challenges.

Peak Re’s reinsurance revenue reported for 2023 was $1.56 billion, a decline of 14.6% from 2022, while the reinsurance service result reported was $189 million, against a loss of $132 million in 2022.

Meanwhile, the reinsurer’s assets under management increased by 6.1% from 2022 to $3.12 billion, with an investment income of $114 million.

At the same time, total equity rose 14.3% to $1.28 billion and the solvency ratio was 305% for 2023.

Franz-Josef Hahn, Chief Executive Officer, Peak Re commented, “We reached these remarkable milestones in 2023 through the decisive actions taken to realign our Property & Casualty portfolio and unwavering trust and support by our clients.

“Despite the heightened market volatility and uncertainty that marked the beginning of 2023 characterised by stubbornly high inflation rates, tightening monetary policies and escalating geopolitical tensions, we persevered.”

Speaking on the firm’s Property & Casualty (P&C) portfolio, Hahn said, “The success of our P&C portfolio realignment is clearly demonstrated by the significant improvement in our P&C combined ratio to 87.3% in 2023 from 110.1% in 2022.

“This is achieved through focused efforts to manage the frequency and severity risks of our property catastrophe reinsurance portfolio. We strategically moved away from soft-market structures, such as quota share reinsurance with wide loss corridors and multi-risk aggregates and moved to adopt excess of loss layers with higher attachment points.”

Hahn continued, “Central to this strategic realignment is our commitment to regular, transparent and timely dialogues with our clients. We consistently present alternative solutions and help our clients to restructure their reinsurance programs as needed.

“Our strong and enduring client relationships are best exemplified by the fact that over 90% of our gross written premium reported in 2023 derived from existing clients.”

Peak Re’s Life & Health (L&H) reinsurance business also demonstrated a good result in 2023, as gross written premium surged to $438 million from $270 million in 2022, in line with its revenue and diversification objective.

The firm said it continued to invest in developing its L&H reinsurance capability in the year, focusing on innovating risk solutions for underserved segments and niche markets.

Hahn concluded, “Our team’s courage and our clients’ steadfast support not only led us back to profitability but also allowed us to fulfil our commitment to serving their needs. In 2024, we maintain a positive outlook for our business. We’ll approach opportunities and risks with prudence, courage and foresight.”

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