Peak Re’s cat bond to be first to use Hong Kong ILS grant

Having recently completed the sponsorship of its first ever catastrophe bond, Hong Kong headquartered global reinsurer Peak Reinsurance Company (Peak Re) wants to play an important role in helping to develop Asia’s insurance-linked securities (ILS) market and building regional resilience.

This is according to Franz Josef Hahn, CEO of Peak Re, who in commenting on the completion of the Hong Kong domiciled Black Kite Re Limited (Series 2022-1) catastrophe bond issuance said the reinsurance company aims to continue its partnership with ILS investors.

Peak Re’s first cat bond priced recently to provide the company $150 million of Japanese typhoon industry-loss based retrocessional protection.

That marked a doubling in size of the issuance, as originally Peak Re had been seeking just $75 million of retro reinsurance with its debut Black Kite Re cat bond deal.

“We are extremely proud to sponsor and complete the first ever 144A cat bond issued by a Hong Kong special purpose insurer. We are pleased to see that the transaction was able to attract significant investor interest, allowing for a 100% upsize from the initial announced transaction size,” CEO Hahn explained.

Peak Re has always had ambitions to work closely with ILS investors as it grows out its reinsurance platform, as evidenced by its sidecar transactions and other collateralized retro activities.

The company wants to continue this, building out its ILS activities for the benefits of its business and the region.

Hahn explained, “Through continued partnership with global insurance-linked securities (“ILS”) investors, Peak Re can play an important role in developing the ILS market and building resilience in Asia and beyond.”

“ILS has become an integral part of our retrocession strategy and has provided meaningful capacity to support the Company’s strong business growth,” added Sascha Bruns, Director, Head of Global Retrocession of Peak Re.

Bruns also noted that, “The successful transaction demonstrates Peak Re’s ability to structure products that are both attractive to the capital markets and serving us well as a risk management tool.”

Black Kite Re was incorporated in Hong Kong and then authorised by the Insurance Authority of Hong Kong to undertake special purpose reinsurance business in or from Hong Kong.

Not only is the first Black Kite Re cat bond the largest so far to be issued out of Hong Kong, it is also the first full 144A catastrophe bond issued from Hong Kong, as the previous $30 million Greater Bay Re Ltd. (Series 2021-1) transaction was more privately placed and also structured as a zero-coupon cat bond.

In addition, the Black Kite Re cat bond is now expected to become the first to use the Pilot Insurance-linked Securities Grant Scheme introduced by the Government of Hong Kong last year, Peak Re explained.

You can read all about this Black Kite Re Limited (Series 2022-1) catastrophe bond from Peak Re, as well as every other cat bond transaction in our extensive Artemis Deal Directory.