Fosun, IFC set up Asia-focused reinsurer

Peak Re has initial capital of $550 million, of which $468 million comes from Fosun, with IFC contributing the remainder. The company is led by Franz Josef Hahn, formerly Greater China head of Swiss Re, while Eckart Roth, previously global risk officer for White Mountains, is chief underwriting officer.

"We believe that the management team of Peak Re will shape the company into a leading modernized reinsurer that is worthy of long-term investment in the Asia-Pacific region," said Guangchang Guo, chairman of Fosun. "Together with Fosun's other insurance projects, we believe our investment in Peak Re will create an anchor revenue stream from the insurance business to support our investment activities and steadily making inroads to establish Fosun as ‘a premium investment group'."

Qunbin Wang, president of Fosun, told the Financial Times that the group's focus on reinsurance was partly inspired by Warren Buffett's Berkshire Hathaway, which relies on reinsurance assets such as General Re and NRG for a lot of its funding needs.

Peak Re will initially focus on property and casualty treaty reinsurance, having noted that Asia Pacific is generally underinsured. In 2011, which saw floods in Thailand and Australia, an earthquake and tsunami in Japan and an earthquake in New Zealand, less than 22% of the economic losses registered were insured. The insurance ratios for losses incurred as a result of natural disasters in the US and Europe during the same were 63% and 50% insured, respectively.

Fosun formed a life insurance joint venture with Prudential in 2011 and set up a $600 million private equity fund with the same partner. The Chinese conglomerate has also made a series of strategic investments globally across pharmaceuticals, healthcare, property, commodities and retail.

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• Topics
• Financials
• Greater China
• Financial Services
• China
• Asia
• Fosun Group
• IFC