Peak Re ponders IPO, but no timeline
No timeline has been set for a potential
initial public offering (IPO) of Peak
Re, but the company is structured so that a
listing could occur eventually, Chris Kershaw,
managing director of global markets at Peak
Re, told Monte Carlo Today.
Since its launch in late 2012 Peak Re has
grown its business substantially. An IPO would
appear to be a natural eventual step for the
company to support its long-term growth,
something that the CFO of Fosun International,
one of its shareholders, acknowledged recently.
But Kershaw said no timeframe is in place.
“We’ve built a sizeable business, without
undercutting or disrupting the market, but
simply by finding areas where there was clearly
demand,” said Kershaw.
“The situation with Peak Re is that we have
two long-term shareholders. We were not built
on the basis of ‘we have to have an IPO within
a certain length of time’,” Kershaw added.
He suggested the infrastructure of the
company has been built on the basis that
an IPO could occur, but there hasn’t been a
timeline on which that has been established.
When looking at how Peak Re was built,
Kershaw believes it was done in a very
strong and sustainable way, with front-loaded
investment in both modelling and pricing.
“When you look at some of the people
we brought into the business in 2016, we’ve
invested in strong risk management, enterprise
“We’ve built a sizeable
business, without undercutting
or disrupting the market.”
risk management, reserving—things that mean
we are serious about having a sustainable
structure for our business,” he said.
In the last two years, Peak Re has appointed
Jacques Burri, the former Zurich reinsurance
manager of Europe, to head its subsidiary in
Switzerland; Christopher Lee, the former
Swiss Re head of client markets for Southeast
Asia, who joined as head of life & health; and
Iain Reynolds, the former Guy Carpenter
head of catastrophe modelling for Southeast
Asia, Korea and India, who joined as head of
The core of Peak Re’s business maintains
a strong Asia-Pacific focus, with around 65
percent of its business there. The remaining
35 percent is spread across the Americas and
“If you go back to the original mission of
Peak Re, it’s a 20 years-plus vision. We’re five
years into that timeline. What we’re building is
a solid base for another generation, hopefully
the generation that currently works with us,”
In August 2016, Peak Re completed its
strategic investment of a 50 percent stake of
the Caribbean insurer Nagico.
Commenting on this transaction, Kershaw
said: “Making an investment in Nagico allowed
us access to a much a broader portfolio of risks,
such as motor, casualty or even life, than if we
acted as a traditional reinsurer taking on purely
nat cat risk.”
But he stressed that Peak Re is very much
a reinsurer, and is not looking to be an insurer.
“We’re not looking to replicate what certain
large reinsurers have done, and start to compete
with our own traditional client base,” he said.
“That’s absolutely not our approach.” n
Irma will focus rating agencies on reinsurers’ ERM performance
The current hurricane activity, which may
continue during the rest of the year,
could prove to be an acid test of reinsurers’
enterprise risk management (ERM) strategies,
Stuart Shipperlee, partner at Litmus Analysis,
told Monte Carlo Today. This, as much as claims
levels themselves, could have a major impact on
Of 19 reinsurers that S&P Global assesses in
what it calls its global peer group, six have the
highest possible ERM score, 11 have the second
highest score, and the remaining two of the 19
have a healthy score.
“The current S&P view is that the reinsurance
industry has very robust ERM. Indeed, they
stress that as their first point in their explanation
“Reinsurance is the best
performing insurance industry
sector for ERM quality,
according to S&P.”
as to why they continue to have the reinsurance
industry at a stable outlook, despite several years
of very poor underwriting and pricing conditions.
It has been the central plank of the maintenance
of stable reinsurer ratings,” Shipperlee said.
Reinsurance is the best performing insurance
industry sector for ERM quality, according to
S&P. Shipperlee suggested it’s similar for AM
Best’s ratings, which are underpinned by their
confidence in the industry’s ERM.
A key point Shipperlee noted is that ERM
has been a rapidly developing skillset in the
reinsurance industry, and it seems to have done
a thorough and complete job exercising that
knowledge and developing it.
“That rapid evolution has meant that it
hasn’t really been tested in a while. We had
2011, and to a certain degree 2012, but a great
deal has happened since in the development of
reinsurer ERM,” he said.
“Even if Irma turns out not to be the
truly big one in terms of a reinsurance cat
event—which at this point we don’t know—it
will certainly have a strong chance of shining
a spotlight on whose ERM has proved to be
12 | MONTE CARLO TODAY | DAY 4: Wednesday September 13 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com