Peak Reinsurance, a global reinsurer based in Hong Kong, has launched Asia's first sidecar transaction via a new Bermuda-domiciled special purpose insurer, Lion Rock, to provide collateralised retrocession for part of Peak Re's global property reinsurance risk portfolio.
The establishment of this special financial structure, commonly known as a “reinsurance sidecar”, allows investors to take on the risk and benefit from specific books of an insurance or reinsurance company.
As part of the deal, Lion Rock Re has entered into an exclusive quota share agreement with Peak Re to reinsure part of Peak Re’s global property reinsurance risk portfolio. Lion Rock Re has successfully secured commitments of $75m from a panel of third-party investors globally. The transaction is expected to close in mid-December 2018.
“Peak Re is pleased to be a pioneer in launching Asia’s first sidecar transaction in the reinsurance industry. It marks an important milestone in the reinsurance market of Hong Kong as well as Asia,” said Mr Franz Josef Hahn, CEO of Peak Re. “The transaction is supported by a range of high-quality global investors who see the investment as a one-of-a-kind opportunity to invest alongside Peak Re and gain exposure to a unique geographically diverse property portfolio.”
Peak Re is rated “A-” by A.M. Best. Fosun International and Prudential Financial, hold 86.9% and 13.1% respectively of Peak Re via Peak Reinsurance Holdings. Peak Re offers reinsurance services covering a range of lines across Asia Pacific, EMEA and the Americas, tailoring risk transfer and capital management solutions to best fit clients’ needs.