A.M. Best Affirms Credit Ratings of Peak Reinsurance Company Limited and Its Subsidiary
The ratings reflect Peak Re’s balance sheet strength, which
Peak Re’s very strong balance sheet is underpinned by sound risk-adjusted capitalization. Although the company had increased its underwriting leverage due to strong premium growth in 2017, investment risk was scaled down, as the company reduced its equity risk exposure and improved the credit profile of its fixed-income investments.
These positive rating factors are offset partially by the volatility in its operating performance as a startup reinsurer with a relatively short operating history, and also the risk of net retentions from multiple catastrophe events from its global book of business. Peak Re utilizes professional catastrophe modeling tools to monitor its exposure internally alongside a prudent retrocession arrangement.
Positive rating actions are unlikely in the near term. Negative rating actions may occur if the company’s risk-adjusted capitalization, liquidity position or financial flexibility level decline to a level below A.M. Best’s expectations, or there is a deteriorating trend in underwriting or investment results. Deterioration in the credit profile of Peak Re’s controlling shareholder,
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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