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

A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating (ICR) of “a-“ of Peak Reinsurance Company Limited (Peak Re) (Hong Kong). The outlook of all ratings remains stable.

The ratings of Peak Re reflect its strong risk-based capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the experience of its senior management, particularly in underwriting reinsurance business. The ratings also recognize the company’s diversified business lines and initiatives to improve underwriting profitability through expanding into North America and Europe.

Offsetting rating factors include the potential volatility in Peak Re’s investment results and the competitive global reinsurance market. As the company allocates a high proportion of investments in equity, a major investment markets downturn could materially affect the company’s future BCAR and liquidity position, as prospectively the company is also expected to face higher underwriting leverage due to business growth. The company monitors these risks on a regular basis.

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 declines to a level below A.M. Best’s expectations, for example, due to a failure to execute its business plan.

The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Catastrophe Analysis in A.M. Best Ratings

• Evaluating Non-Insurance Ultimate Parents

• Insurance Holding Company and Debt Ratings

• Rating Members of Insurance Groups

• Rating New Company Formations

• Understanding Universal BCAR

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.

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