Hong Kong-based reinsurer Peak Re has established the first Asian reinsurance sidecar deal through Lion Rock Re, a recently established Bermuda special purpose insurance (SPI) vehicle.
Lion Rock Re has secured $75 million from third-party global investors, and has entered into an exclusive quota share agreement with Peak Re to provide provide collateralised retrocession for part of Peak Re’s global property reinsurance risk portfolio.
Reinsurance sidecars allow investors to take on the risk and benefit from the return of specific books of re/insurance business.
“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 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.”
The deal is expected to close in mid-December 2018. Aon is the structuring and placement agent for this transaction.
Lawrence Cheng, managing director, underwriting at Peak Re, added: “Peak Re was established in 2012 to support the needs of communities and emerging middle class societies by meeting reinsurance needs covering life, health and non-life risks, in Asia and around the globe. We are very pleased with the positive reception from the ILS investors that recognised our strong track record. We look forward to continuing to broaden our partnerships with the capital markets in the future."
Peak Re, Lion Rock Re, Sidecar, Reinsurance, ILS, Bermuda