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 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 analytics.

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 Europe.

“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,” Kershaw said.

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.”

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