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A.M. Best Affirms Credit Ratings of Peak Reinsurance Company LimitedA.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of Peak Reinsurance Company Limited (Peak Re) (Hong Kong). The outlook of these Credit Ratings (ratings) is stable. The ratings reflect Peak Re's continued sound risk-adjusted capitalization, ability to achieve its targeted premium size and geographical diversification, and profitable operating performance since its inception. In addition, the company received a capital injection of USD 100 million from its controlling shareholder, Fosun International Holdings Ltd. (Fosun) in August 2016 to support its planned business growth. Since 2015, Peak Re managed to expand its geographical presence on treaty business in the Americas and Europe. Peak Re's management expense ratio also continued to improve along with growth in net premium written. Although the company's underwriting performance was impacted moderately by the Tianjin explosion loss in 2015, an appropriate retrocession was in place to contain its retained loss at a manageable level. The company also achieved favorable operating performance that was relatively better than its regional peers since inception in 2013, mainly due to stronger investment income. Partially offsetting these positive rating factors are the volatility in its operating performance as a startup reinsurr with short underwriting history, and potentially higher volatility in investment performance due to its investment risk appetite in riskier assets. While positive rating actions are unlikely, 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 a deteriorating trend in underwriting or investment results emerge. In addition, deterioration in Fosun's credit profile may negatively impact Peak Re's ratings. 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. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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