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Peak Reinsurance Company Ltd (Peak Re) has launched Asia’s first sidecar transaction, through Lion Rock Re, a newly-formed special purpose insurer based in Bermuda.
The transaction will enable Lion Rock Re to provide collateralised retrocession for part of Peak Re’s global property reinsurance risk portfolio. This allows investors to take on the risk and benefit from specific books of an insurance or reinsurance company.
As part of the deal, Lion Rock Re has entered into an exclusive quota share agreement with Peak Re to reinsure part of its global property reinsurance risk portfolio. The former has secured commitments of US$75 million from a global panel of third-party investors.
“We are very pleased with the positive reception from the ILS (insurance-linked securities) investors that recognised our strong track record,” said Lawrence Cheng, managing director of underwriting at Peak Re. “We look forward to continuing to broaden our partnerships with the capital markets in the future.”
Aon Securities acted as the structuring and placement agent of the transaction, which is expected to close within this month.
“[The transaction] 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.”
